- Civic engagement in compliance checking, transparency important
- Lack of clarity on cryptocurrencies fan speculation about ownership, accountability
For many Sri Lankans, democracy feels like a promise that fades the moment politicians take office. Taxpayers are often forced to watch public hospitals struggle, schools deteriorate, and roads crumble, while questions about where all the money goes is left unanswered. There is a call to improve Sri Lanka’s existing legislation on holding policymakers and officials accountable.
New laws now require public officials to declare their assets, but for ordinary Sri Lankans, the pressing question remains: will this system give citizens the power to hold leaders accountable or is it just another layer of paperwork?
Institute for Democratic Reforms and Electoral Studies (IRES) Executive Director Manjula Gajanayake said: “Transparency is the only way to keep those in power accountable. Politicians can easily forget the promises they made during elections if no one is watching. Public declarations of assets ensure that citizens and the media can see what leaders hold, and question them when their actions don’t match their words.”
Gajanayake’s sentiments capture the everyday frustration of Sri Lankans who feel distanced from decision-making processes yet are most affected by their outcomes. For the small business owner struggling with rising costs, the teacher facing delays in salary payments, or the student watching school facilities deteriorate, the question of accountability is not abstract; it is about resources, fairness, and trust in institutions.
The public declaration of assets and liabilities by elected officials and senior public officers, in theory, offers a bridge between citizens and the corridors of power, giving the public a tool to hold leaders accountable.
A legal framework in transition
The Declaration of Assets and Liabilities Law No.1 of 1975 laid the foundation, mandating that MPs, judges, senior public officers, and other officials disclose their financial holdings.
However, decades of practice have revealed significant ambiguities. Definitions of what constitutes ‘assets’ and ‘liabilities’ have been vague, verification mechanisms limited, and enforcement of penalties for false or incomplete declarations sporadic.
Senior Attorney-at-Law Sampath Perera noted that the Anti-Corruption Act No.9 of 2023 represented a major legal modernisation. “This act consolidates prior laws and creates a unified statutory basis for compliance,” he said.
Section 80 clearly defines who must declare assets, including the President, MPs, provincial council members, judges, senior public officers, and election candidates, and prescribes precise timelines for end-of-tenure, post-retirement, ad hoc, and election-related declarations.
A centralised electronic system, administered by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) and backed by the Electronic Transactions Act, now provides a legally valid mechanism for submission. Redacted declarations are made publicly accessible, balancing transparency with privacy, while criminal liability for false statements reinforces enforceability.
Despite these improvements, Perera warned that delays in submission, incomplete declarations, or complex financial structures, including offshore holdings, could undermine verification.
“The degree of redaction in publicly accessible declarations could obscure significant information, and enforcement may be slowed by procedural delays or political interference, weakening the deterrent effect,” he explained.
He also highlighted cybersecurity risks inherent in reliance on an electronic system.
Why transparency matters
For citizens, these legal nuances translate into very real consequences. Take, for example, a resident from Borella, Namal Karunadasa, a small-scale entrepreneur in Colombo.
“I pay taxes every month,” he said. “I expect those taxes to be used responsibly. But when I hear about officials owning multiple properties overseas while public hospitals lack beds, I feel cheated.”
Karunadasa’s sentiment reflects a common experience: people feel powerless when financial mismanagement goes unchecked. Public access to asset declarations is more than a bureaucratic requirement; it is a tool for ordinary citizens to demand accountability and justice.
Adding to the public concerns, IRES Executive Director Gajanayake stressed that transparency should apply universally. “Politically exposed persons cannot say that no one can question them or send a notice. You cannot ask to be treated differently. You have to adopt and apply these principles,” he stated.
For citizens like Karunadasa, this principle is personal: without the ability to scrutinise leaders’ finances, the promises of democracy remain abstract, distant, and fragile.
In January, Sri Lanka introduced an electronic asset declaration system to reduce manual errors and improve accessibility. The CIABOC also issued detailed guidelines for standardising asset reporting, clarifying procedures for submission and verification. Discussions on further legal reforms continue, aiming to address ambiguities, strengthen verification, and impose stricter penalties for non-compliance.
Int’l standards and lessons
Sri Lanka’s efforts align with global anti-corruption norms. The United Nations Convention against Corruption (UNCAC) encourages member states to require public officials to declare assets, liabilities, and income, while emphasising protection of personal data. Similarly, the Financial Action Task Force (FATF) recommends asset declaration by politically exposed persons, balancing transparency with privacy safeguards.
These frameworks demonstrate a universal challenge: ensuring that disclosure laws serve the public without creating undue risk for officials or their families. For the citizens, however, the most relevant question is whether these laws provide meaningful oversight or merely generate paperwork.
In such a backdrop, Perera suggested concrete steps to improve enforcement, recommending strengthening the CIABOC’s auditing capabilities through automated cross-checks with tax authorities, financial intelligence units, and other agencies. Risk-based audits of high-value or high-risk declarations, mandatory supporting documentation for significant asset changes, enhanced inter-agency data sharing, and robust cybersecurity measures are all necessary to close potential loopholes.
“While the act is legally robust, proactive focus on enforcement, verification, and systemic integrity is essential to promote transparency, accountability, and public confidence in governance,” Perera noted.
On the other hand, Gajanayake highlighted the human responsibility: declarations are only meaningful if citizens can engage with them. Media scrutiny, public debate, and civil society vigilance transform raw data into accountability. “When it is public, the media can question and hold those in power accountable,” he said.
Yet, as both Gajanayake and Perera caution, systems and laws are only as effective as their implementation. Transparency is meaningless without public scrutiny and legal frameworks cannot prevent corruption without active enforcement. Citizens must remain engaged, using available tools to ensure that accountability reaches beyond paper into practice.
Box
Cryptocurrency: A bubble waiting to burst?
For ordinary Sri Lankans, cryptocurrencies have become a hedge against an economy battered by inflation and a depreciating rupee. USDT, bitcoin, and other digital assets provide a sense of financial stability amid uncertainty. Yet a new concern is emerging: some of those tasked with making the laws may themselves be investing in these unregulated assets.
Recent revelations that certain ministers reportedly hold cryptocurrencies have sparked a wave of calls for transparency.
Samagi Jana Balawegaya (SJB) Gampaha Electorate Organiser Waruna Deepthi Rajapaksha highlighted the risks during a press briefing on 18 September. “Certain ministers have used cryptocurrency as their investments. However, cryptocurrency is not legally recognised in Sri Lanka. There is no legal barrier to holding it, but it cannot be used for currency exchanges or transactions,” he alleged.
Rajapaksha stressed that public officials must disclose relevant information, including the source of funds, and highlighted the role of the CIABOC in probing compliance.
KPMG Sri Lanka Tax and Regulatory Division Principal Suresh R.I. Perera confirmed that cryptocurrencies operated in a legal grey zone. “They are neither explicitly permitted nor banned. Individuals engage in crypto at their own risk,” he said.
Perera noted that crypto trading was growing in shops, hotels, and among private investors, and was increasingly being used to transfer money abroad in a manner reminiscent of the old ‘hawala’ system. He warned: “While crypto is not formally illegal, it is unregulated, and public officials holding these assets could bypass financial oversight.”
The Central Bank of Sri Lanka has issued multiple warnings regarding virtual currencies. Notices in 2022 and 2023 highlighted that cryptocurrencies were unregulated, carried financial and operational risks, and were not recognised as legal tender. Use of debit or credit cards for crypto transactions is prohibited, and the bank urged the public to refrain from trading or promoting crypto investments.
Despite these warnings, no specific laws govern cryptocurrencies in Sri Lanka. Existing legislation — including the Monetary Law Act, Banking Act, Financial Transactions Reporting Act, and Payment and Settlement Systems Act — only indirectly addresses virtual currencies in the context of money laundering and financial crime.
Economist Umesh Moramudali warned that speculative trading in cryptocurrencies was risky and could have macroeconomic consequences if unregulated. “Cryptocurrencies often lead to market bubbles, and when those bubbles burst, they affect the wider economy,” he said.