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Gunaruwan: ACSA, SOFA, MCC could be part of US Indo-Pacific strategy

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US leaves Lanka out of MCC

By Shamindra Ferdinando

The much-touted Millennium Challenge Corporation Compact (MCCC) would have undermined Sri Lanka’s status as a sovereign country, Prof. Lalithasiri Gunaruwan said yesterday (17).

Prof. Gunaruwan, an economist, who headed a four-member committee that examined the controversial agreement was responding to the US decision to terminate the offer of USD 480 mn (Rs 89 bn) development assistance against the backdrop of Sri Lanka declining the grant.

The Colombo University don whose four-member committee strongly objected to the agreement as it is, told The Island that the compact posed a threat to Sri Lanka.

He said that he wasn’t aware of negotiations between the two parties on the basis of their report handed over to President Gotabaya Rajapaksa on Feb 17, 2020 at the Presidential Secretariat.

The team consisted of Prof. Gunaruwan (Chairman), one-time Transport Secretary Dr. D. S. Jayaweera, Justice Nihal Jayawardena, PC, and architect Nalaka Jayaweera.

Responding to another query, Prof. Gunaruwan said his committee had recommended remedial measures following an in-depth study of the agreement. He acknowledged that the committee couldn’t ascertain the position taken by the Attorney General in that regard.

The Attorney General’s position has not been made public yet.

In response to The Island query as regards Sri Lanka being denied funding, the US embassy has sent us the following statement: “On December 15, the Millennium Challenge Corporation (MCC) board decided to discontinue the proposed Rs. 89 billion MCC development assistance grant to Sri Lanka due to lack of partner country engagement. The Rs. 89 billion approved for Sri Lanka will be made available to other eligible partner countries in need of grant funding to pursue their economic development priorities, reduce poverty, and grow their economies.

“Country ownership, transparency, and accountability for grant results are fundamental to MCC’s development model. MCC has successfully partnered with nearly 30 countries worldwide on 38 grant agreements, totaling nearly $13.5 billion. These grants have lifted millions of people from poverty by catalyzing local and domestic investment.

“The United States remains a friend and partner to Sri Lanka and will continue to assist Sri Lanka in responding to COVID and building its economy.”

Subsequently, The Island sought an explanation from the US mission with regard to the previous US embassy announcements pertaining to the funding made available to Sri Lanka to the tune of USD 10 mn on two occasions.

The US embassy spokesperson said the MCC grant monies had never been transferred to or spent by Sri Lanka in terms of the then proposed USD 480 mn funding. The official said that funds amounting to USD 10 mn for what the embassy called preparatory activities had been cancelled. The official said: “The government of Sri Lanka first submitted a proposal for MCC grant funding under former President Mahinda Rajapaksa in 2005. All activities in the most recent proposed grant were requested by Sri Lankan Government line ministries and departments, and the programme was negotiated in good faith after extensive consultations with Government officials, the private sector, and civil society. The MCC grant would have been the largest in Sri Lanka’s history and would have benefited more than 11 million Sri Lankans.”

During the previous administration, the US announced the disbursement of USD 7.4 mn (Rs. 1.1 bn) on July 27, 2017 and USD 2.6 mn (Rs.413) in June 13, 2018 grants for preparatory work namely (i) to develop a compact, including identification and analyzing of specific projects and (ii) to finalize compact development. The US embassy stated funds allocated to the tune of USD 10 mn were in addition to the total MCC compact funding amount.

Prof. Gunaruwan’s report has said that in spite of the US Compact being categorised as a development project, it could pose a threat along with ACSA (Acquisition and Cross Servicing Agreement) and SOFA (Status of Forces Agreement). The UNP-led government finalised ACSA in the first week of August 2017. President Maithripala Sirisena, in his capacity as the Defence Minister authorised the signing of the agreement. The US agreements dominated both 2019 presidential and 2020 parliamentary polls. The report says the three agreements could be part of the overall US Indo-Pacific strategy.

Well-informed sources said that the four-member committee had found fault with a decision to allow all procurement and related matters to take place. That decision clashed with a specific provision in the 19th Amendment, sources said. However, the 20th Amendment enacted by the incumbent government had done away with that provision, sources said.



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Elders’ home devastated by fire was a ‘house of horror’: Witnesses

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Death toll rises to 12: Director remanded

Some residents were allegedly chained

Police have come under public pressure to investigate allegations of inhumane treatmenf the residents at an elders’ home in Batagoda, which was also reportedly used as a care centre for persons with special needs, following a devastating fire that has so far claimed 12 lives.

Eyewitnesses who were among the first responders told the media that several residents had been chained inside rooms at the Senehase Kedella Elders’ Home when the fire broke out on Wednesday. They claimed that rescue efforts were hindered as iron chains could not be removed, and that some residents died while being restrained.

Authorities have not yet verified these claims, and Police said investigations are continuing.

Police spokesman ASP F.U. Wootler, contacted for comment, said there were rumours to that effect, but the Police were not in a position to verify the claims until a report from the Government Analyst was received. He said eight survivors with burn injuries were being treated in hospital.

Meanwhile, the Director of the facility had been arrested and was due to be produced before the Horana Magistrate’s Court, Police said adding that he was remanded till June 11.

The death toll from the fire has risen to 12 as of Thursday morning following the recovery of additional charred remains during ongoing forensic examinations at the site. Six others sustained serious injuries and are being treated at the Horana Base Hospital.

Police said 72 residents were inside the facility at the time of the blaze. Of them, 10 died inside the building, seven were injured and hospitalised, while 51 were rescued and relocated.

Survivors were initially housed at Batagoda Junior School before being transferred with Army assistance to another branch of the same care network in Galpatha.

A magisterial inquiry was conducted on Thursday morning. Horana Magistrate Lakmini Vidanagamage visited the scene. The burnt remains were examined and removed under judicial supervision.

Separately, allegations have emerged that residents were required to pay an admission fee of Rs. 75,000, along with a monthly charge of Rs. 35,000 to the centre. Police have not commented on these claims.

The director was taken to the scene as part of ongoing investigations, while forensic experts continue examinations to determine the cause of the fire, which remains undetermined.Anguruwatota Police are conducting investigations.

 By Norman Palihawadane and Nishan S Priyantha

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CERT : AI-generated videos depicting Prez, PM lure public into financial scams

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Sri Lanka CERT has issued a public warning over the circulation of artificial intelligence (AI)-generated videos falsely depicting President Anura Kumara Dissanayake, Prime Minister Harini Amarasuriya and several other prominent personalities to promote fraudulent investment schemes online.

According to complaints received by the national cyber security agency, the videos have been created using deepfake technology and are being used as part of attempts to defraud members of the public through financial scams.

The images of famous sports personalities and other public figures have also been misused in the deceptive content.

The agency has warned that similar AI-generated material has been used to spread false information relating to investment opportunities, employment offers, as well as matters concerning the country’s economy and tax policies.

According to Sri Lanka CERT, the videos are being widely shared across online platforms and frequently contain links urging viewers to make investments in return for purported profits.The agency has cautioned that these links may redirect users to fraudulent websites designed to steal personal information, financial data and money from unsuspecting victims.

Sri Lanka CERT has urged the public to exercise extreme caution when encountering such content online and advised against clicking on suspicious links or sharing personal information through unverified websites.

“The public should remain vigilant and avoid becoming victims of false information and online fraud schemes,” the agency said.

Sri Lanka CERT has also encouraged internet users to verify information through official sources before acting on any investment, employment or financial offers circulated via social media or other online platforms.

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New tax law comes into force

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Speaker Dr Jagath Wickramaratne endorsing the certificate on a Bill (File)

Speaker Dr Jagath Wickramaratne on Wednesday endorsed the certificate on the Inland Revenue (Amendment) Bill, bringing the legislation into force as the Inland Revenue (Amendment) Act, No. 11 of 2026, Parliament sources said.

The Bill, which amends the Inland Revenue Act, No. 24 of 2017, was passed by Parliament on May 19.

The new law introduces a series of reforms aimed at modernising tax administration procedures, improving compliance and enforcement mechanisms, enhancing the accuracy of tax calculations and deductions, and strengthening transparency within the tax system.

The amendments also support broader economic policy objectives and include measures designed to reinforce anti-money laundering safeguards.Among the key provisions of the Act is the mandatory use of Taxpayer Identification Number (TIN) certificates for specified high-value financial transactions.

The legislation also introduces revisions to the calculation of taxable income, clarifies tax exemptions applicable to certain projects and business entities, and expands the scope for information disclosure to relevant authorities.

The amendments are expected to improve the efficiency of tax administration while facilitating greater accountability and regulatory oversight.With the Speaker’s endorsement of the certificate, the Inland Revenue (Amendment) Bill has now become law as the Inland Revenue (Amendment) Act, No. 11 of 2026.

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