Sri Lanka’s national Terrorist Financing risk assessed as medium-high: National Risk Assessment 2024/25

Sri Lanka has successfully completed the National Risk Assessment (NRA) 2024/25 on Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF), in collaboration with a total of 86 governmental organizations, regulatory bodies and private sector institutions.

Accordingly, the country’s national Terrorist Financing (TF) risk, a combination of TF threat and vulnerability, was assessed as medium-high, reflecting an increase from medium level in the previous assessment. This risk was driven by a rise in threat level to medium-high reflecting evolving threats from both extremist and separatist networks, supported by possible diaspora funding, digital radicalization, regional spillover risks, and the use of informal and emerging financial channels. Meanwhile, vulnerability remained unchanged at medium level.

Under the ML threat assessment, drug trafficking was identified as the most serious predicate offence, with the ML threat level increasing to high from the previous medium-high rating. It was followed by fraud, and customs related offences, including Trade-Based Money Laundering (TBML), which were assessed as medium-high. The threat level of bribery and corruption has decreased from a medium-high rating in the previous assessment to a medium level. This reduction is reflected by improved Corruption Perceptions Index (CPI) score, which increased from 32 in 2024 to 35 in 2025. Further, robbery, environmental and natural resource crimes, illegal, unreported and unregulated (IUU) fishing related unlawful activities, human trafficking and tax offences also recorded as having a medium level of ML threat. For the first time, violations under Excise Ordinance were assessed and rated as medium-low. Counterfeiting of currency continued to reflect a low ML threat level, consistent with the previous assessments.

In addition to the above, country’s first national risk assessment of PF was assessed and it was rated as medium, reflecting the combination of a globally significant threat environment and identified domestic vulnerabilities.

The ML and TF risk across financial institutions and designated non-financial businesses and professions sectors as follows;