SAFN Exec.Dir. Asanga Abeyagoonasekera was at the 41st Economic Crime Symposium at the University of Cambridge on (September 5th 2024), discussing Sri Lanka’s ongoing challenges with terror financing, corruption, and governance failures. He highlighted the need for reform in outdated anti-terror laws, independent institutions, and regional cooperation. Following is an abstract from his speech.

Your Excellencies, Ladies and Gentlemen,

It is a privilege to be invited for the 41st Economic Crime Symposium here at Cambridge University. I am honored to return to Jesus College for the sixth time, joining a global gathering of experts who offer their insights across a wide range of disciplines. 

In addressing you today, I draw from multiple roles. As a former technical advisor for the IMF’s Governance Diagnostic and a researcher I’ve had a front-row seat to the political and economic dysfunction that plagues South Asia, especially in Sri Lanka. My research endeavors, however, have often led to personal consequences. Three years ago, I left Sri Lanka after uncovering autocratic corruption and democratic suppression under the rule of two brothers. Although the 2022 people’s uprising ousted them, a hybrid regime remains, led by a caretaker president whose primary role has been to dismiss corruption cases against these very brothers.

My continued work in exposing corruption has made me a target, forcing me to live in exile. I authored a book ‘Teardrop Diplomacy’ published by Bloomsbury on the Sri Lankan case, and upon returning briefly to the country due to my mother’s critical illness two months ago, I was arrested at the airport. Thanks to international help and the judiciary, I was released and allowed to leave the country, but my mother passed away the day I was freed. The experience reinforced my understanding of Sri Lanka’s fragile state, where economic collapse has driven desperation, crime, and widespread corruption. One example that stands out from my time in detention: a man imprisoned for stealing a copper wire worth less than $75 to feed his ailing mother. This is the grim reality of a bankrupt nation.

With a presidential election scheduled for September 21st, I hope that change is on the horizon—one that restores democracy, rule of law, and governance. However, my hope lies in the integrity of the Sri Lankan judiciary, as highlighted in three key reports:

1. The IMF Governance Diagnostic Report
2. The 2024 UN OHCHR Human Rights Report
3. The Sri Lanka Presidential Election 2024:PEA Study

For those unfamiliar with Sri Lanka’s experience with terrorism, allow me to provide a brief overview. Sri Lanka endured nearly three decades of brutal conflict with the Liberation Tigers of Tamil Eelam (LTTE), commonly known as the Tamil Tigers. Thousands lost their lives during this period, and I, too, am among those directly impacted—my father was killed in a Tamil Tiger suicide attack in Colombo in 1994. The war ended in 2009, leaving behind a deeply scarred nation in dire need of genuine reconciliation.

The 2019 Easter Sunday terror attacks, which claimed over 250 lives, further underscored the country’s vulnerabilities. Despite these devastating events, the Sri Lankan government has failed to conduct credible investigations or foster reconciliation, as outlined in recent UNHRC reports. One critical aspect often overlooked is the role of terror financing. Analysts have long recognized that without financial backing, terrorist networks cannot survive. From the LTTE’s diaspora funding to the financing behind the Easter Sunday attacks, terror financing has been the lifeblood of these operations.

Sri Lanka’s vulnerability to terror financing can be examined through three key lenses:

1. Failed governance and political interference – When governance structures collapse, counterterrorism mechanisms also fail, as highlighted by the IMF Governance Diagnostic Report.
2. The Prevention of Terrorism Act (PTA) – This outdated legislation requires urgent reform, a point raised repeatedly by the EU, US, and UN Human Rights bodies.
3. Lack of regional cooperation – The absence of an effective regional mechanism, largely due to tensions between India and Pakistan, has hindered intelligence-sharing and cooperation, as noted by Sri Lanka’s Financial Intelligence Unit (FIU).

As former US Secretary of State Colin Powell once said, “Money is the oxygen for terrorism.” It fuels everything from recruitment to arms purchases and the movement of operatives across borders. The LTTE mastered this system over decades, and the Easter Sunday attackers similarly relied on well-organized financial networks. The FIU’s 2022 report assessed Sri Lanka as a ‘Medium’ threat country, but recent events, including the arrest of four Sri Lankan terrorists in India, highlight that the danger remains high.

Criminal activities, particularly drug trafficking, continue to be a primary source of terrorist financing in the region. Sri Lanka’s strategic location, with its open coastal belt and ports, makes it a gateway for illicit trade. The use of informal money transfer systems, like Hawala, along with the adoption of modern technologies such as cryptocurrency, further complicates the fight against terror financing.

However, beyond technical mechanisms like AML/CFT, the root issue lies in the politicization of independent institutions. Terror laws are weaponized to suppress dissent and target journalists and civil society activists. The misuse of the PTA is well-documented, as civil society leaders highlighted in the PEA study. Arbitrary arrests, detention, and even torture continue, despite promises of reform. The UN’s 2024 Human Rights Report confirms these concerns, stressing the urgent need for independent institutions.

The social fabric of Sri Lanka, already torn by decades of war and two youth insurrections, remains fragile. The current government, under the unelected President Ranil Wickremasinghe, has failed to restore the independence of key institutions like the judiciary. The ongoing crackdown on journalists, as evidenced by Operation Yukthiya, an operation to crack down drug traffickers, further exemplifies the selective application of anti-terror laws. Ironically, the very minister overseeing the operation was previously implicated in a terror financing case.

In closing, Sri Lanka’s challenges are multifaceted—ranging from terror financing and systemic corruption to political interference and the erosion of democratic freedoms. The upcoming elections offer a sglimmer of hope, but true progress will only come when independent institutions are free from politicization, and when the voices of those who speak out against injustice are no longer silenced.