But today, the many international conventions and the resultant resolutions that have taken place, post 9/11 to which we have all become signatories, consolidates our international obligations in the fight against terrorism. That indicates to us, that we are not alone in this struggle. In fact, today, we witness a closing of ranks amongst all the countries of the world to fight terrorism. While these efforts are commendable, all of us would also have to grudgingly admit that, notwithstanding the enhanced global counter-measures, terrorism worldwide is still on the increase. According to a US report released recently, an increase of 29% has been recorded last year in  2  BIS Review 48/2007  worldwide terror attacks, which have become even deadlier. As a result, global terrorism deaths have recorded a 40% increase last year. In Afghanistan alone which is represented here at this Forum, the number of terror attacks have almost doubled. The self destruction in the form of suicide bombers that Sri Lanka’s Tamil terrorists launched in recent times, have now become commonplace in many parts of the world. Such incidents are almost a daily occurrence, making human life a cheap commodity as a means to an end in the armoury of terrorists. In the meantime, the economic effects of terrorism in almost all our countries, is also becoming very challenging. In this regard, the recent air attacks by Tiger Terrorists may have opened a new chapter in the book of international terrorism.
In the years 2005 and 2006 three key laws were enacted, namely, The Convention on the Suppression of Terrorist Financing Act, The Prevention of Money Laundering Act, and the Financial Transactions Reporting Act. The FTR Act created the institutional body of the FIU within the Central Bank, with regulatory powers and a mandate, inter alia, to formulate policies and guidelines to meet the Financial Action Task Force (FATF) 40 + 9 recommendations. The enactment of the necessary AML/CFT legislation in Sri Lanka, early last year and the establishment of the Financial Intelligence Unit soon after, demonstrates Sri Lanka’s strong commitment to the global efforts to fight financial crime and terrorism. Naturally, therefore, in this effort, the areas of vulnerability have been identified and adequate measures taken to deal effectively with the weaknesses. The stakeholders also need to be adequately equipped to discharge their responsibilities effectively. We therefore, see today’s effort at building capacity and processes, as one of the most important pre-requisites for the implementation of an effective AML/CFT regime, and we commend the World Bank and all others who are involved in this endeavour. My dear friends, Sri Lanka has been ever mindful of its obligations in this regard and has been a pioneer in this field. Long before the advent of the AML and CFT legislation, certain safeguards to insulate our financial system from money launderers and terrorists were in fact put in place by us. This was done through legislation such as the Exchange Control Act, the Banking Act and the Customs Ordinance.