By: Staff Writer
June 02, Colombo (LNW): In a bold move to strengthen national security and align with global counter-terrorism standards, the Sri Lankan Ministry of Defence has issued an Extraordinary Gazette announcing the freezing of all financial assets, funds, and economic resources of individuals, groups, and entities designated under the United Nations Regulations No. 1 of 2012.
The Gazette notification, released under the signature of Defence Secretary Air Vice Marshal (Retd) Sampath Thuyacontha, was published on May 30, 2025. Thuyacontha, who serves as the Competent Authority under the UN Regulations, exercised his powers under Regulation 5 to enforce these financial restrictions with immediate effect.
The latest directive applies to all persons—natural or legal—listed under Regulation 4 of the same regulation, first published in Gazette Extraordinary No. 1854/41 dated March 21, 2014. The list of designated entities has been updated multiple times, with the latest changes formalized through Gazette Extraordinary No. 2438/47 issued on May 30, 2025.
Under the new orders, the government has not only frozen the assets of designated individuals and organizations but also revoked earlier freezing orders issued through Gazette notifications No. 2335/31 (June 10, 2023), No. 2387/03 (June 3, 2024), and No. 2424/52 (February 20, 2025).
However, the Ministry has clarified that this revocation does not nullify any enforcement or action previously taken under those gazettes. The new list of designated persons replaces the prior schedules published in March 2014 and last amended in February 2025.
This legal mechanism forms part of Sri Lanka’s obligations to comply with international frameworks combating terrorism financing and the proliferation of weapons of mass destruction. The UN Regulations No. 1 of 2012 provide the legal basis for the government to identify and act against individuals and groups that pose a threat to global peace and security.
National Security vs. Individual Rights: A Complex Balancing Act
The move has sparked mixed reactions among legal experts, human rights activists, and financial analysts. While many commend the Defence Ministry for its proactive stance on cracking down on illicit financial flows, others caution against potential overreach and unintended consequences.
Advantages of the New Regulation
Proponents argue that freezing the assets of designated individuals and entities prevents the misuse of the financial system for extremist purposes.
This enhances Sri Lanka’s international standing and protects the country from sanctions or grey-listing by global watchdogs like the Financial Action Task Force (FATF). It also sends a strong message that the government is taking terrorism financing seriously.
The regulation is also expected to improve coordination between domestic intelligence agencies and international organizations like the United Nations, Interpol, and the Egmont Group, facilitating more efficient tracking of illicit networks.
Concerns and Risks
However, civil society organizations and legal experts have raised red flags over the broad scope of the regulation. There is concern that individuals or organizations may be included in the designated list without adequate due process or the opportunity to challenge their designation in a transparent and timely manner. Such missteps could lead to wrongful asset freezes, damaging reputations and livelihoods without recourse.
Moreover, businesses and NGOs that operate in conflict-prone or politically sensitive areas may be inadvertently impacted if their names or associations are misunderstood or misinterpreted. Critics emphasize the need for oversight mechanisms, independent review boards, and judicial pathways to appeal any questionable listings.
Implications for Affected Individuals and the Broader Economy
For individuals and organizations affected by the new designation, the implications are severe. Access to bank accounts, investments, and other financial instruments is immediately restricted. Property holdings may be frozen, and business operations could grind to a halt. The stigma associated with being publicly listed as a potential security threat also carries long-lasting personal and professional consequences.
There is also the potential for indirect fallout. Employees of such organizations, family members, and affiliated partners may face financial insecurity or social stigma, raising ethical questions about collective punishment and the need for safeguards.
As Sri Lanka navigates a complex security landscape, the government’s recent asset freeze under the UN Regulations marks a firm step in combating terrorism financing.
However, the long-term success of this policy will depend not only on enforcement but also on transparency, due process, and robust mechanisms to ensure that justice is served fairly—without compromising civil liberties.
