Transparency International Sri Lanka (TISL) is concerned by steps taken by the government to enact a “no questions asked” policy on deposits of foreign currency. Whilst TISL recognizes the need for policies to bolster foreign currency reserves, we strongly believe that any new policies should be consistent with Sri Lanka’s anti-money laundering framework. TISL Executive Director Asoka Obeyesekere said, “At a time when there is an unprecedented lack of parliamentary and judicial oversight on government actions, coupled with limited proactive disclosure of information - corruption risks and vulnerabilities are exacerbated. It would therefore be unwise for a caretaker government to implement policies which could encourage money laundering, with potentially far reaching detrimental effect to the Sri Lankan economy”. Sri Lanka was only recently removed from the “Grey List” of the Financial Action Task Force (FATF) and steps including “no questions asked” policies on foreign deposits could have a negative impact on the country’s ability to attract bona fide investment. Furthermore, this contravenes FATF recommendations which set the international standards on combating money laundering, requiring reasonable measures to be taken to ascertain both sources of wealth and sources of funds. In its report “COVID-19 Related Money Laundering and Terrorist Financing: Risks and Policy Responses” published this week, the FATF continues to recommend risk-based supervision of transactions, which would be contrary to any “no questions asked” policy. Countries with escalating money laundering exposure, risk FATF black listing, which has far reaching consequences on domestic banking and economic activity. The “no questions asked” policy is reminiscent of a similar invitation extended by then Finance Minister Ravi Karunanayake in late 2015 to local and foreign investors to deposit foreign exchange in Sri Lanka, in special accounts with premium interest rates. Similar concerns were also raised by TISL regarding the potential money laundering risk surrounding the purported foreign direct investment by an Indian politically exposed person with multiple corruption allegations in 2019 for the USD 3.85 Billion Mirijjawila Oil Refinery project in Hambantota. In both these instances, democratic dissent allowed for a broad public debate, which has been rendered near impossible in this case due to the COVID-19 pandemic. Obeyesekere concluded, “It is important for the government and the Central Bank of Sri Lanka to consider the mid to long term implications of policies which may inadvertently encourage money laundering. This could have serious repercussions on the economic recovery as Sri Lanka emerges from the COVID-19 pandemic”