Sri Lanka’s police have reopened several major corruption cases, particularly those involving members of former President Mahinda Rajapaksa’s family under the new Government led by President Anura Kumara Dissanayake.
These include investigations into the unexplained wealth of Rajapaksa’s second son, Yoshitha Rajapaksa, connected to the latter’s maternal grandmother Desi Aachchi, and allegations against his first son, Namal Rajapaksa, involving misappropriation of funds in the Krishh property deal and irregularities tied to SriLankan Airlines.
These same cases were pursued during the 2015–2019 Yahapalana (Good Governance) administration but ultimately faltered due to inadequate legal frameworks for asset recovery and enforcement.
Recognising this gap, the International Monetary Fund (IMF) in its September 2023 Governance Diagnostic Assessment explicitly recommended strengthening asset recovery measures, including non-conviction-based confiscation mechanisms.
In a landmark step, Parliament last week enacted the Proceeds of Crime Act, aimed at identifying, seizing, and repatriating assets gained through criminal conduct.
Widely hailed as a foundational element in Sri Lanka’s evolving anti-corruption agenda, the new law signals more than just reform. It confronts a deeply entrenched system of impunity that has long undermined institutions, destabilised the economy, and eroded public trust.
As Sri Lanka embarks on implementing this legislation, many are cautiously optimistic: Could this finally mark a turning point in the country’s decades-long battle against corruption?
Deep-rooted corruption
To understand the significance of the Proceeds of Crime Act, it is essential to appreciate the depth and pervasiveness of corruption in Sri Lanka. Corruption is not a recent problem; it has become embedded within the political, administrative, and commercial fabric of the country over generations. Since independence, Governments have operated within a patronage-driven political culture where loyalty often trumped competence or legality.
This system has fuelled inefficiencies and nepotism across the public sector. State resources have routinely been used for electoral advantage, jobs have been distributed as political rewards, and procurement processes manipulated to benefit allies.
A major facilitator of this environment has been the chronic lack of transparency and accountability. Oversight institutions such as the Auditor General’s Department, the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), and even the police have often been neutered through political interference or persistent under-resourcing.
Sri Lanka’s struggle with corruption has not stemmed from a lack of laws, but from a lack of implementation and political will. Numerous anti-corruption initiatives have been announced over the years, particularly during election campaigns, but few have led to tangible outcomes such as convictions or asset recovery.
In several cases, legal action was stalled or abandoned for technical reasons or because the Attorney General’s Department chose not to pursue prosecution despite available evidence. Even significant reforms, such as the 19th Amendment to the Constitution in 2015, which created independent commissions, were later rolled back by the 20th Amendment in 2020, re-consolidating power in the Executive Presidency and weakening oversight institutions.
Despite promising anti-corruption platforms, leaders such as Maithripala Sirisena were unable or unwilling to sustain these efforts in the face of resistance from entrenched interests within their own coalitions.
Vested interests
One of the key obstacles to anti-corruption progress in Sri Lanka has been the entrenched opposition from powerful vested interests—including political elites, influential business figures, senior public officials, and even elements within the judiciary.
Many former and current politicians have viewed anti-corruption mechanisms as personal threats rather than tools of governance. Given the deep interweaving of politics with patronage networks, illicit campaign financing, and public fund misuse, any robust oversight risks exposing these systems and triggering legal consequences.
This fear has prompted efforts to weaken institutions like CIABOC, manipulate legal reforms, or protect allies through immunity or selective enforcement. Moreover, anti-corruption campaigns have often been weaponised for political ends, with new Governments targeting rivals while sparing allies—further eroding public confidence and feeding the perception that such efforts are politically motivated.
A close alliance between political leaders and business magnates has fuelled crony capitalism in Sri Lanka. In this model, economic opportunities are awarded not based on merit but on political connections.
Politically connected individuals have routinely secured lucrative contracts, monopolies, and access to public assets with minimal scrutiny. In return, they finance campaigns or provide other support to ensure the survival of their political patrons.
This has skewed the economy, discouraged innovation, and marginalised honest entrepreneurs. Public tenders and infrastructure projects have frequently bypassed competitive bidding, and national assets—including ports, land, and State-Owned Enterprises (SOE)—have been leased or sold below market value to well-connected parties. The result is widespread economic inequality and a public sector that favours a privileged few.
Complicity of public officials
High-ranking bureaucrats in institutions such as the Customs, the Ports Authority, and the Inland Revenue Department have long played a central role in facilitating corruption. Occupying key gatekeeping roles, these officials have leveraged their authority for personal gain by soliciting bribes, manipulating tax records, or greenlighting illegal transactions.
Instead of acting as neutral regulators, they have become participants in the corrupt ecosystem, enabling illicit wealth creation and shielding wrongdoers from scrutiny. This has not only resulted in massive revenue losses but has also discouraged foreign and local investment.
Reform efforts within these institutions have frequently been sabotaged by those seeking to protect their illicit earnings, leaving honest officers marginalised or punished for whistleblowing. Without deep-rooted reform, these institutions remain vital arteries in the machinery of systemic corruption.
Some members of the police and the judiciary have also faced accusations of derailing investigations in exchange for political favours or bribes. This further entrenches a culture where whistleblowers are punished, and accountability remains elusive.
The toll of corruption on Sri Lanka has been devastating and even immeasurable. Iconic cases such as the 2015 Central Bank bond scam, the 2013 SriLankan Airlines-Airbus deal, the 2021 Pandora Papers revelations, and the 2006 MiG aircraft procurement scandal all underscore how systemic and damaging corruption has become.
In 2022, the nation declared its first-ever sovereign default, a crisis driven by years of mismanaged, corruption-laced infrastructure spending. Trust in public institutions—from the judiciary to the police—has plummeted, and foreign investors increasingly cite corruption as a major deterrent.
Basic public services such as healthcare, education, and transport suffer due to the diversion of funds. Faced with limited opportunities and an unjust system, many of the nation’s youth have opted to migrate abroad, accelerating a brain drain that hinders long-term development.
Promise of the Proceeds of Crime Act
In this grim context, the Proceeds of Crime Act stands out as a potentially transformative tool. The law empowers the authorities to trace, seize, and recover assets linked to criminal conduct, even without a prior criminal conviction, through civil forfeiture mechanisms.
Key provisions include:
Cross-border asset tracing: The Act enables collaboration with international agencies and foreign Governments to track and recover illicit wealth.
Civil recovery standards: Authorities can pursue asset recovery based on a balance of probabilities, rather than the stricter standard of beyond reasonable doubt.
Specialised task forces: A central authority will coordinate investigations, manage seized assets, and oversee recovery.
Whistleblower protection: Though nascent, the Act includes early safeguards for individuals reporting illicit enrichment.
This law closes a critical gap in Sri Lanka’s legal framework, where previous legislation could punish wrongdoing but rarely enabled the recovery of stolen funds.
Can it target the Rajapaksa-era corruption?
Public interest in the new law is focused sharply on whether it can help recover assets misappropriated during the Rajapaksa years. These administrations (2005–2015 and 2019–2022) have been linked to major financial irregularities involving state projects like the Hambantota Port, Mattala Airport, and the Lotus Tower.
Allegations also point to luxury properties abroad, offshore accounts, and shell companies allegedly controlled by the Rajapaksa family or close associates. Theoretically, the Act could enable authorities to pursue these assets retroactively, within constitutional bounds.
However, several hurdles must be overcome:
Proving illicit origins: Even under civil standards, tracing assets hidden through complex networks is challenging.
Political influence: Enforcement agencies must be insulated from political pressure to pursue powerful figures.
International legal cooperation: Recovery depends on the willingness and compatibility of foreign jurisdictions.
Despite these challenges, many within civil society, the legal community, and international partners are urging swift and impartial enforcement.
The road ahead
Ultimately, the success of the Proceeds of Crime Act will depend on more than its legislative text—it hinges on consistent, credible implementation.
President Dissanayake has made governance reform a core part of his mandate. His administration’s launch of the National Anti-Corruption Action Plan (2025–2029) alongside the Proceeds of Crime Act suggests a coordinated strategy.
Global stakeholders are watching. Institutions such as the IMF, World Bank, and bilateral partners have made financial support conditional on meaningful anti-corruption reform. The UNDP and the Japanese Government have welcomed the new direction but underscore the importance of accountability and transparency.
The coming months will be critical. As investigations progress and the first assets are targeted for recovery, the Government will be tested against entrenched resistance.
If implemented faithfully, the Proceeds of Crime Act could mark a turning point for Sri Lanka—not just in recovering wealth but in restoring faith in governance. If not, it may become yet another symbol of unfulfilled promises in a country weary of them.
