(English) NGJA Role

National GEM & Jewellery Authority Role on Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT)

Target markets of National Gem & Jewellary Authority are the high end markets that always look for delicate and unique presence of styles in jewellery as well as in Gems. To remain successfully in holding our position, National Gem & Jewellery Authority has to address both customers’ needs and regulatory needs as the sole statutory Authority in Sri Lanka for Development, regulation and promotion of the Gem & jewellery Industry.

In order to expand our business locally and internationally Authority shall adopt and as a result of it, Authority is in the process of moving into internationally recognized standards.

The powers and functions of the National Gem and Jewellery Authority are interpreted by Section 14 of the National Gem & Jewellary Authority Act No: 50 of 1993. According to that section we are expected to carry out following tasks for the Development, regulation and promotion of the Gem & jewellery Industry.

Sri Lanka is currently working to strengthen its Anti Money Laundering (AML) and terrorist financing regulations. In 2006, Sri Lanka underwent a Mutual Evaluation from the Asia/Pacific Group on Money Laundering (APG).

Sri Lanka’s Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regime comprises with three pieces of legislations as follows.
1. Conventions on the Suppression of Terrorist Financing Act No 25 of 2005 (CSTFA).
2. Prevention of Money Laundering Act No 05 of 2006 (PMLA.
3. Financial Transactions Reporting Act No. 06 of 2006 (FTRA).
It has been identified that, the most important one is the FTR Act, which established Sri Lanka’s Financial Intelligence Unit (FIU). The Financial Intelligence Unit (FIU) of Sri Lanka was established in March 2006 as an autonomous body under the Ministry of Finance and Planning. The FIU was reorganized as a Department in the Central Bank of Sri Lanka in February 2007 and then functions as an independent institution within the Central Bank’s framework and administrative structure.

The FIU has made some rules by a Gazette No: 1951/13 dated 27.01.2016 under section 2 of the Financial Transactions Reporting Act No. 06 of 2006. These rules shall apply to every Institution which engages in Finance Business. Specially these rules said “Every Financial Institution shall take the measures specified in these rules for the purpose of identifying, assessing and managing money laundering and terrorist financing risks posed by its customers, by conducting ongoing customer due diligence based on the “risk based approach.”

National Gem & Jewellary Authority is not an Institution which engages in Finance Business under the Financial Transactions Reporting Act No. 06 of 2006 and above Gazette. But FIU has published some new rules by a Gazette moderating the above said Gazette No: 2053/20 – Wednesday, January 10, 2018 cited as Designated Non-Finance Business (Customer Due Diligence) Rules, No. 1 of 2018.

Accordingly the above mentioned Rules, the National Gem & Jewellary Authority is an Institution which engages in Non-Finance Business under the section 2 (c) as follows.
(c ) “dealers in precious metals and dealers in precious and semi-precious stones, including but not limited to, metals and stones covered by the Gem and Jewellery Act, No. 50 of 1993 when they engage in cash transactions with a customer, equal to or above the prescribed threshold ;”

In these circumstances National Gem & Jewellary Authority shall take the measures specified in these rules for the purpose of identifying, assessing and managing its money laundering and terrorist financing risks in relation to its customers, countries or geographical areas and products, services, transactions or delivery channels.

To provide the necessary measures to combat and prevent money laundering and to provide for matters connected therewith or incidental thereto National Gem & Jewellary Authority has taken its activities since year 2017 as follows.

 YEAR 2017

In November 2017, the National gem and Jewellery Authority (NGJA) has conducted an awareness meeting to the Directors of NGJA on the Draft “CDD Rules for Designated Non-Finance Businesses”

In December 2017, the NGJA appointed a coordinating officer to deal with the FIU requirements with the approval of the Board of Directors of NGJA.

 YEAR 2018

In January 2018, the NGJA has conducted an awareness meeting to the officials of regional offices in Rathnapura, Naula, Mathara, Eheliyagoda, Monaragala and Colombo. In that meeting, regional staff was instructed to make awareness on the CDD requirements for gem and jewellery dealers of their regions, when they conduct field visits to gem and jewelry dealers.

In February 2018, NGJA has conducted a meeting with Regional Managers and the NGJA had inquired the progress of making awareness on AML/CFT requirements on field visits.

In March 2018, NGJA has conducted a half day awareness programme to the Export Division and Export Promotion Division of the NGJA, in regarding the AML/CFT compliance obligations to be met by the gem and jewellery dealers.

In April 4, 5 and 6 in 2018, the initial Workshop on National Risk Assessment (NRA) 2018 -, conducted by the officials from the World Bank (WB) and few officials of NGJA has participated.

In September 2018, an awareness session has been conducted by the FIU to the officials appointed by the National Gem and Jewellery Authority (NGJA) for joint supervision of gem and jewellery dealers.

In October 2018, officials appointed by the National Gem and Jewellery Authority (NGJA) for joint supervision of gem and jewellery dealers have engaged with the progress review visits of gem and jewellery dealers.

In November 2018, few officials of NGJA have participated in a Technical consultancy session conducted by the officials of World Bank (WB).
In November 2018, Published the Newspaper Articles on
I. Irida Diwaina Sinhala Newspaper dated 16th December, 2018
II. Silumina Sinhala Newspaperdated 16th December, 2018
III. Sunday Observer English Newspaper dated 16th December, 2018
IV. Thinakaran Waramanjari Tmail Newspaper dated 16th December, 2018

 Year 2019

To provide the necessary measures to combat and prevent money laundering and to provide for matters connected therewith or incidental thereto National Gem & Jewellary Authority has scheduled its activities on Year 2019 as follows.
1. Introducing following documents would be mandatory in order to be eligible for Gem dealer Licence.
I. Bank Statements of past three months
II. Police Report of the Proprietor/ Partners/ Directors
III. Certified Copy of the Business Registration
IV. Photocopy of National Identity Card
V. Residency Certificate issued by Grama Niladhari
VI. Foreign Partners or Directors should submit a Recommendation Letter from Embassy/ High Commission in Sri Lanka of relevant country.

2. Introduced a new system for the Export procedure for record keeping.

3. Distributed the following Rules and circulars & the awareness leaflets & Advertisement among the Gem & Jewellery Dealers.
• Rules for Designated Non-Finance Business (Customer Due Diligence) Rules, No. 1 of
• Guidelines on AML & CTF Compliance Obligation for Dealers in Real Estate and Precious Metals, Precious and Semi-Precious Stones,No. 03 of 2018.
• Compliance Officer Declaration
• a Handbill regarding the AML/CFT compliance obligations created by NGJA

4. Nominated the NGJA officers for joint AML/CFT supervision.

 Year 2020 – Year 2023

1. Nominated the following two NGJA officers for joint AML/CFT supervision.
I. W.G.N.M. Premachandra – Enforcement & Regional Development Assistant
II. P.D.C. Premarathne – Enforcement & Regional Development Assistant

2. In January, 2020 shared the list of dealers who has obtained new Gem Dealer License, renewed the existing Gem Dealer License and who has obtained Jewellery Registration Certificate during September to December 2019 with FIU.

3. In 24th of September, 2021 conducted a meeting with the participation of newly appointed Chairman & CEO of NGJA through Microsoft Team with the team of FIU.

4. In November, 2021 circulated the Risk Assessment Questionnaire 2021 of the Gem and Jewellery Sector via email among gem and jewellery dealers.

5. In February, 2022 conducted a Special meeting on few important matters relevant to Anti-Money Laundering and Countering the Financing of Terrorism for the gem and jewellery export sector with the officials of National Gem & Jewellery Authority and the officials of the Financial Intelligence Unit at the State Ministry of Gem & Jewellery related industry, No 561/3, Elvitigala Mawatha, Colombo 05.

6. In October, 2021 conducted a meeting with the participation of newly appointed Chairman & CEO with officials of FIU.

7. In October, 2022 shared the Information brochure on AML/CFT for Gem and Jewellery dealers in three languages via electronic media among the Exporters who are the Lisence holders of NGJA .

8. With the support of NGJA, FIU conducted an awareness programme titled “Complying with AML/CFT obligations for Strengthening Economic Development of the country” for the members of the Gem and Jewellery Sector including Compliance Officers on October 17, 2022, at the Center for Banking Studies (CBS), Rajagiriya and the Chairman & CEO of NGJA, Mr. Viraj De Silva delivered a key note speech regarding Complying with AML/CFT obligations.

9. In November,2022 shared the database of gem and jewelry dealer license holders as at November 09, 2022, in order to identify the dealers who have not yet registered with the FIU with FIU

10. In 22nd of June, 2023 conducted a meeting with the participation of Chairman & CEO of NGJA with the team of FIU regarding Complying with AML/CFT obligations.

11. In July, 2023 submitted the Compliance officer declarations Forms completed by Gem Dealer Lisence Holders to the FIU.

12. In November, 2023 took the approval from the distinguished board members of the Authority for the Action Plan of Anti- Money Laundering and Countering the financing of Terrorism for 2023-2028.

13. In December, 2023 established a dedicated unit to fulfill the specified sub-activities in the AML/CTF action plan of NGJA for 2023-2028 and incorporate into the organization structure.

 YEAR 2024

1. In 14th March, 2024 conducted a Special meeting to discuss the AML/CFT Action Plan for the gem and jewellery export sector.

2. In March, 2024 conducted a Special meeting to discuss the AML/CFT matters with the Police Narcotic Bureau officials and FIU.

3. In March, 2024 took the approval from the distinguished board members of the Authority to incorporate the special conditions to the Gem dealer license specially addressing measures aimed at combating money laundering.

4. In May 9, 2024 conducted a meeting with Dr. Gordon, the international AML/CFT consultant of the Central Bank, at the FIU.

5. In May 29, 2024 conducted an awareness meeting with the officials of FIU to the Gem & Jewellery License holders in the areas of Galle and Mathara.

To be continued …….

Prepared by:
Janani M.Dayarathne*
Assistant Director (Legal)
Coordinating Officer between the NGJA and FIU
National Gem & Jewellery Authority.