Gem industry struggles amidst high taxes, illegal practices
- 5opn1
- December 17, 2024
- Business News
- Gem industry struggles amidst high taxes
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The Central Bank of Sri Lanka (CB), through its Financial Intelligence Unit (FIU), has enhanced its current efforts of discouraging money laundering and other illicit activities involving the gem and jewelry industry, which is already affected by high taxes.
The FIU carried out awareness programmes on the Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT) compliance obligations among the participants in the industry.
The CB is preparing for the 2025 international evaluation of Sri Lanka’s AML/CFT framework to maintain global reputation and secure market access. Key initiatives included training on the Financial Transactions Reporting Act (FTRA) and Customer Due Diligence (CDD) requirements for gem transactions exceeding US$15,000.
Despite these measures, the gem trade in Ratnapura and Beruwala remains largely informal, with only 12 per cent of daily transactions—valued at over Rs. 10 billion—processed through legal channels.
However informal systems like hawala are frequently used for financing gem purchases, bypassing formal banking systems and complicating the enforcement of regulation, a senior official of Sri Lanka’s National Gem and Jewellery Authority said
