Priority need to focus on Controlling Serious Economic Crimes

Open letter to President Gotabaya Rajapaksa

The Ministry of Defence has advertised five vacancies for the “Recruitment as Reserve Assistant Superintendents of Police to the Ministry of Defence, affiliated to the Sri Lanka Police, skilled professionals to become proud members of the Ministry of Defence, dedicated to the sovereignty, unity and territorial integrity of Sri Lanka as well as to public safety and to play a superior role for the nation. These recruits will function as Cyber and Forensic Analyst, Geo-Political and Strategic Analyst, Counter Terrorism and Violent Extremism Analyst, Economic Analyst and Statistical Analyst (the last two covering security perspectives regarding national security)”. Any justified decision to strengthen the knowledge and skills based professional capability of existing human resource of the state is a welcome move, so long as the recruits have in addition to the specified qualifications, requisite commitments to best practice professional standards, ethics, correct attitudes and values.

The caring civil society fervently hopes, in accord with your stated commitments in the manifesto and the several public pronouncements that followed your election as the President, that you, with the support of your Cabinet colleagues and the top officials of the executive, will similarly focus on the essential priority need to focus on controlling serious economic crimes, which can easily debilitate the financial integrity, fiscal and monetary stability and solvency of Sri Lanka; and if allowed unabated will destabilise the economy and prevent the realisation of the goals of splendour and prosperity.

The optimum operational environment to assure financial integrity minimizing serious economic crimes is by having effective laws, regulations, policies, systems, procedures, practices and controls, with efficient and effective independent oversight mechanisms, enforcements, investigations and prosecutions, followed by independent justice systems with penal sanctions and recovery of proceeds of crime. The critical drivers of such a system are independence, capability and professionalism of supporting human resources in the entire chain. It is however quite evident from many case studies that the systems controlling financial integrity of Sri Lanka fails to meet required standards of effectiveness, due mainly to the lack of competent and committed professionals in the chain engaged in independent oversight mechanisms, enforcements, investigations and prosecutions. Due to this incapacity the independent oversight control, enforcement, investigation, prosecution and punishment of offenders of money laundering, transfer pricing, securities offenses, bribery, corruption, financial fraud, organised crimes, drug trafficking, smuggling, and avoidance of taxes/ excise and customs duties are ineffective; and more importantly the recovery of proceeds of these crimes eventually fail and are thus unable to restore the state revenues leaked and state assets stolen or defrauded.

Civil society looks to you as the President, to take early action to strengthen the structures, systems, laws and regulations along with the capacity of the resource persons engaged in the independent oversight control and enforcement of mechanisms; and thereby minimise serious economic crimes system wide and facilitate successful recovery of proceeds of crime. In the above context it is suggested that you pursue the undernoted strategic action steps under your direct leadership supervision:

* Seek Cabinet approval to set up an Enforcement Directorate similar to that of India under the supervision of the Inspector General of Police, reporting to an Independent Public Commission made up of three members, comprising of a high integrity competent retired Appellate Court Judge, a retired Senior Officer of the Auditor General’s Department and a retired Senior Officer of the Central Bank.

* Enforcement Directorate to be entrusted with the mission of minimizing the identified serious economic crimes systems wide; enhancing oversight mechanism and controls system wide and where suspected that any such crimes having taken place professionally investigating and prosecuting, optimizing recovery of proceeds of crime

* Seek technical support in setting up the Enforcement Directorate from the Financial Integrity Unit of the World Bank and its affiliates Financial Action Task Force, UN Office on Drugs and Crime and the Stolen Asset Recovery Initiative with extended human resource training and development support from bi lateral supporting countries and other specialized agencies

* Recruit competent and highly professional staff for the Directorate, similar to the staff recruited to the Defence Ministry; and support them with requisite resources, knowledge, skills, systems, data bases, best practices and technical and investigation assistance linkages

* Enact essential legal and regulatory reforms, commencing with the early enactment of the Proceeds of Crime Act draft sent to the previous regime for cabinet endorsement

* Enhance the capability of the prosecutors of the Directorate to successfully prosecute serious economic crimes and judges to effectively support the judicial processes connected therewith

* Make it a compulsory requirement of all state remunerated persons to adopt the ethical standard to report to the Directorate any known or suspected non compliances with laws and regulations

Trust you and your advisory team will give due consideration to this submission

Chandra Jayaratne