Sri Lanka's Anti-Corruption Act No. 9 of 2023: What Businesses Need to Know

The Anti-Corruption Act No. 9 of 2023 replaced the Bribery Act, the CIABOC Act and the asset declaration law. It gives the Commission arrest, search and freezing powers, reaches private-sector bribery and unexplained wealth, and punishes most offences with up to seven years' imprisonment.

For most of its history, Sri Lanka's law on bribery and corruption was spread across several ageing statutes, the oldest dating to the 1950s. The Anti-Corruption Act changed that and widened the field in ways that matter to businesses, not only to public officials. Two related regimes sit alongside it: plea agreements under the Code of Criminal Procedure, and forfeiture under the Proceeds of Crime Act.

What the Act repealed and when it began

Section 163(1) repealed the Commission to Investigate Allegations of Bribery or Corruption Act No. 19 of 1994, the Declaration of Assets and Liabilities Law No. 1 of 1975 and the Bribery Act (No. 11 of 1954). The Act was certified on 8 August 2023. Section 1(2) left commencement to a ministerial order, and the Commission records that it came into operation on 15 September 2023, with the first Commission under it starting work on 1 January 2024. Proceedings under the repealed Acts continue under them (section 163(2)(f)), and section 42(10) allows investigation of conduct that predates the Act.

The Commission and its powers

The Act is built around a strengthened Commission to Investigate Allegations of Bribery or Corruption, still known as CIABOC. Section 3 makes it a body corporate that acts without direction or interference from anyone other than a court. Section 4 gives it three members, appointed by the President on the Constitutional Council's recommendation, each with at least twenty years' experience in law, crime investigation, forensic auditing or a related field. A Director-General runs investigations and prosecutions.

The Commission may open an inquiry on a complaint, on information or on its own motion (section 42), and every public authority that suspects an offence must refer it (section 43(3)). Where an investigation discloses an offence, section 65 requires the Director-General to prosecute, by charge sheet in the Magistrate's Court or by indictment in the High Court signed by the Director-General rather than the Attorney-General. Under section 130 no Magistrate's Court may entertain a prosecution the Director-General has not brought.

The main offences

The core term is gratification, which section 162 extends to money (including digital currency), gifts, loans, office or employment, the discharge of a debt, sexual favours and any other service, favour or advantage, together with any promise of one. Under section 110 an offer or acceptance made outside Sri Lanka is deemed to have been made within it.

• Bribery of public officials. Sections 93 to 103 cover gratifications to or from judges and Members of Parliament (section 93), police and court officers (section 96), and officials in relation to Government contracts, tenders and Government business (sections 97 to 99). Under section 99(c) a public official who solicits or accepts any gratification commits bribery, whatever it was for.
• Corruption. Section 111 covers a public official who, intending wrongful loss to the Government or wrongful benefit to anyone, acts by virtue of office, uses official information or induces another official to act.
• Trading in influence. Section 104 covers offering a gratification to a public official or anyone else to influence them with a view to obtaining a benefit from the Government, and soliciting or accepting one for that purpose.
• Bribery of a foreign public official. Section 105 covers a gratification offered to a foreign official to obtain or retain international business, whether or not it influenced the official.
• Bribery in the private sector. Section 106 covers a gratification offered to an employee or director of a private sector entity to act in breach of duty, and its solicitation or acceptance. A private sector entity is a specified business enterprise under the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, so the offence does not reach every business.
• Conflicts of interest. Section 107 requires a public official to disclose any interest that they, a relative or an associate has in a party their authority proposes to deal with, and to abstain from the decision.
• Sporting events. Section 108 covers gratifications for influencing the run of play or outcome of a sporting event, or for not reporting it.
• Unexplained wealth. Section 109 applies to anyone. Property that cannot have come from a person's known income or receipts is deemed acquired by an offence under the Act unless the person proves otherwise (section 109(1)); property acquired by a spouse or an unmarried child under 18 on or after the Act's commencement is presumed to be the person's own (section 109(5)); and no prosecution may be brought until the person has been given an opportunity to show cause (section 109(4)).

Penalties

Most offences share a ceiling of a fine of Rs 1 million and seven years' rigorous imprisonment, though the drafting differs on whether the two are cumulative or alternative. Section 114 adds a further penalty equal to the value of the gratification (section 114(1)), on a section 109 conviction a fine of one to three times the amount acquired (section 114(2)), and forfeiture of property acquired through the offence (section 114(5)). A person convicted under Chapter I is barred from voting for seven years, disqualified for life from public employment and, if a public official, deemed dismissed (section 114(7)). Sections 133 to 135 extend every offence to abetment, attempt and conspiracy.

Asset declarations: who must file and when

Part II replaces the 1975 law with a centralised electronic system run by the Commission (section 83). Section 80 lists who must declare: the President, Ministers, Members of Parliament, judges and staff officers of ministries and departments; armed forces officers; staff officers of the Central Bank and State banks; boards of public corporations; directors and staff officers of companies in which the State holds at least 25 per cent; managerial staff of scheduled financial institutions; office-bearers of political parties and trade unions; newspaper and media proprietors and editors; election candidates; and any high-risk category added by regulation.

The declaration covers the declarant, spouse, dependent children of any age and anyone who has shared the household for six months (section 81). Section 82 sets the timetable: within three months of appointment, annually by 30 June as at 31 March, within fourteen days of leaving office and in each of the two following years, within one month of any change in value of Rs 10 million or more, and with nomination papers. Section 88 requires a redacted version of every declaration to be published on the Commission's website within a month. An annual declaration still unfiled by 1 September is an offence punishable with a fine equal to twelve months' salary or a year's imprisonment (section 90(5)).

Investigation, arrest and search powers

Section 47 allows an authorised officer to arrest without a warrant on reasonable suspicion, and section 48 requires production before the nearest Magistrate within 24 hours. Section 45 allows a search of premises, vehicles or persons on the Commission's own written order, not a court warrant, with a signed list of anything seized served on the owner. Section 49 lets the Commission examine any person on oath, summon documents and direct banks to produce account information about a person under investigation. Section 149 makes every offence cognizable and non-bailable, with bail under the Bail Act No. 30 of 1997, except that a person produced with the Director-General's certificate of detection while soliciting, accepting or offering a gratification must be remanded until the end of the trial unless the Magistrate finds exceptional circumstances.

Section 53 is the provision businesses most often meet first. The Commission may by written order freeze the property of a person under investigation, of their family, of anyone holding property for them and of any company of which they are a director, and may have their passport impounded for up to three months. The order lasts seven days unless the Commission applies to the High Court for confirmation; the High Court may extend it for up to a year, and once an indictment is filed it runs until the trial ends (section 53(3)). Any transaction in breach of a freezing order is void (section 53(11)).

Informers, whistleblowers and immunity

The identity of a confidential informer may not be revealed in any proceedings (section 73(1)), though where the court considers that justice cannot be done without it, section 73(3) allows it to require production of the original complaint and full disclosure concerning the informer. and a person who gives information in the reasonable belief that it is true incurs no civil or criminal liability (section 73(5)). An informer may not be subjected to reprisal or dismissal, and where that is alleged it is presumed until the contrary is proved (sections 73(6) and 73(9)); any contract term that discourages reporting is void (section 73(8)). Section 74 extends the same protection to an employee who reports to a superior, and section 76 provides that a statement to the Commission cannot be used against its maker, subject to prosecution for false evidence and for offences under the Act.

Companies, directors and deferred prosecution

Section 116 provides that where a body of persons is convicted, every director, officer or agent of a company, and every partner of a firm, is liable to the fine for the offence unless they prove that it was committed without their knowledge or that they used all due diligence to prevent it. That defence is why a documented compliance programme matters: a gifts and hospitality policy, due diligence on agents and a conflicts register are the evidence. Section 117 extends the term employee to former employees, contractors, board members and trainees, and section 153 applies the Act to citizens who offend abroad.

For private-sector bribery and sports offences, section 71 allows a deferred prosecution agreement, suspending proceedings for five to ten years on conditions sanctioned by the High Court: a public apology, reparation, an undertaking not to reoffend, or payment to the State of the full amount involved. Where the accused is a company, the agreement is made with the company (section 71(8)). Section 115 separately allows non-conviction-based forfeiture on the balance of probabilities.

What to do if you are served with a notice

A notice from the Commission is a legal command. Section 145 binds every person required to give information to give it, notwithstanding any obligation of secrecy, and section 146 requires compliance with any lawful demand or order. Failure without reasonable excuse is an offence under section 126, and refusing to appear or produce documents is contempt of the Commission, triable by the Supreme Court (section 118); that the matter is before a court is no excuse (section 118(4)).

1. Take legal advice before responding. Section 127(2)(b) permits disclosure of the notice to an Attorney-at-Law; disclosing it to others in a way that could prejudice the investigation is an offence under section 127(1)(m).
2. Preserve every document; concealing or destroying relevant material is an offence under section 127(1)(j).
3. Answer truthfully, and know the limit. Section 147(1) binds a person not to utter falsehoods, but its proviso says an accused person is not obliged to give self-incriminating or confessional statements, and any such statement is inadmissible.
4. If property has been frozen, the Commission must seek High Court confirmation within seven days (section 53(2)); on confirming the order the court must publish notice of it in the Sinhala, Tamil and English press so that bona fide third parties can bring their claims (section 53(4)). The court may permit essential business transactions under supervision (section 53(12)).
5. If the notice is a show-cause letter under section 109(4), it is the last opportunity before an unexplained-wealth prosecution; document income, receipts and the chain of acquisition for each asset.

Anti-corruption compliance is no longer only a public-sector concern. Any company with Government contracts or foreign dealings should look again at its internal controls, its gifts and hospitality policy, its arrangements with agents and intermediaries, and how it handles conflicts of interest. Investigations and compliance are covered by regulatory investigations and compliance.