India to help Sri Lanka set up FIU to trace billions stashed abroad

India will help Sri Lanka set up a finance intelligence unit (FIU)-like entity in the island nation at Colombo’s request to trace more than $5 billion allegedly stashed overseas by the erstwhile Rajapaksa regime. 

President Maithripala Sirisena is moving to fulfill electoral promises to check corruption and repatriate money allegedly siphoned off abroad by Mahinda Rajapaksa, who ruled Sri Lanka for a decade, and members of his family, government sources told ET. 

The new Lankan regime has informally approached the Narendra Modi government to assist in setting up the body, sources said, adding that a formal proposal could be expected soon. 

The finance ministry will share its best practices with Colombo to set up the unit, which could be modelled after the Indian body, the sources indicated. 

“We could help close neighbour Sri Lanka with capacity building exercise regarding FIU,” said an official familiar with the process. 

India set up the FIU in November 2004 as a national agency to receive, process, analyse and disseminate information related to suspect financial transactions. It coordinates and strengthens efforts of national and international intelligence, investigation and enforcement agencies in pursuing global efforts against money laundering and related crimes, reporting directly to the finance minister. Last November, FIUIndia and its Australian counterpart decided to jointly crack down on international financial crimes. 

India could also consider a formal proposal from Colombo seeking the Reserve Bank of India’s expertise in tracing money allegedly hoarded in tax havens. The Sirisena government has also sought help from the World Bank and the International Monetary Fund in locating this hidden wealth to expose the alleged corruption of the previous regime. The Sri Lankan government does not possess this expertise, according to Health Minister and cabinet spokesman Rajitha Senaratne. 

- Economic Times of India