Japan Launch Criminal Investigation into Sri Lankan BASL Over JICA Funding Scandal
A JICA-funded anti-corruption project becomes the subject of corruption allegations itself—and both Japanese and Sri Lankan law provide grounds for criminal accountability.
The Scandal
The Bar Association of Sri Lanka (BASL) is at the center of a major financial controversy involving funds from the Japan International Cooperation Agency (JICA). Approximately Rs. 19 million out of Rs. 21 million allocated for an anti-corruption initiative—titled "Data Collection Survey to Promote Transparent and Competitive Business Climate in Sri Lanka"—was allegedly misappropriated by senior BASL officials.
The irony is stark: the workshops were designed to combat bribery and corruption in Sri Lanka, organized in collaboration with JICA and international experts. Instead, it became a case of the watchdog failing to watch itself.
The Committee's Findings
A five-member Special Committee, chaired by Faisz Musthapha PC, submitted a 48-page report after eight sittings.
Kaushalya Nawaratne, PC (BASL President): The committee found Nawaratne "failed to act with transparency" regarding the JICA contract, thereby "violating the trust" placed in him as BASL President. The contractual process was "handled almost entirely" by him and "lacked transparency."
Nalinda Indatissa, PC (Deputy President): The committee found Indatissa "failed to exercise meaningful oversight" over the process.
The committee recommended establishing a financial manual and stated BASL members should not receive financial benefits from BASL matters unless approved by the Executive Committee and Bar Council.
The Japanese Legal Framework
Japan has both the legal authority and the obligation to pursue this matter. Several provisions apply:
1. ODA Accountability and Asset Recovery
Japan is a State Party to the United Nations Convention against Corruption (UNCAC) and the United Nations Convention against Transnational Organized Crime . Under these treaties, Japan may assist other countries in recovering assets that are proceeds of crime. The Act on Prevention of Transfer of Criminal Proceeds establishes the Japan Financial Intelligence Center (JAFIC), which can disseminate information on suspicious transactions to foreign Financial Intelligence Units .
Importantly, Japan may provide mutual legal assistance in criminal matters even in the absence of a Mutual Legal Assistance Treaty, provided the requesting State offers an assurance of reciprocity . This means Japan could formally request Sri Lanka to investigate the BASL-JICA fund misappropriation.
2. Dual Criminality Requirement
Under Japanese law, assistance involving confiscation or preservation requires "concrete" dual criminality—the act must be punishable in both Japan and the requesting country . Misappropriation of entrusted funds qualifies as a criminal offense in both jurisdictions.
3. Investment Protection Agreement
The Japan-Sri Lanka Investment Agreement (1982) provides that nationals and companies of either country shall receive "constant protection and security" within the other's territory . It also guarantees access to courts and administrative tribunals for the pursuit and defense of rights . While focused on investment, this framework reflects Japan's commitment to legal accountability in Sri Lanka.
4. Japan's Anti-Corruption Commitment in Sri Lanka
In February 2024, Japan launched a 137 million JPY (approx. USD 931,000) project titled "Promoting Economic Governance through Anti-Corruption Policy Support in Sri Lanka," implemented with the UNDP . The project aims to:
Strengthen the legal and policy framework
Enhance coordination among key institutions fighting financial and tax crimes
This demonstrates Japan's active interest in Sri Lankan anti-corruption efforts—making the BASL scandal a matter of direct concern for Japanese policy.
The Sri Lankan Legal Framework
Sri Lankan law provides several avenues for criminal prosecution:
1. Criminal Breach of Trust
Under the Sri Lankan Penal Code, Section 386 (concerning dishonest misappropriation of property) and Sections 388 and 389 (both regarding criminal breach of trust), any person—including public officials—who dishonestly misappropriates property commits an offense .
The Penal Code, Section 392A specifically addresses criminal breach of trust by public servants in respect of money. An essential ingredient is the failure to pay or account for money when required to do so .
The Public Property Criminal Offences Act, No. 12 of 1982, Section 392, provides for double penalties for public officials who misappropriate public property .
2. Commission to Investigate Allegations of Bribery or Corruption (CIABOC)
The Commission to Investigate Allegations of Bribery or Corruption Act No. 19 of 1994 establishes a permanent commission to investigate allegations of bribery and corruption . The Commission has extensive powers:
Power to authorize searches of premises, vehicles, and persons
Authority to seize articles believed to be evidence of offenses
The Commission consists of three members, of whom two must be retired Judges of the Supreme Court or Court of Appeal—demonstrating the serious legal framework Sri Lanka has established .
3. Broad Legislative Framework
Sri Lanka has adopted a comprehensive legislative framework dedicated to preventing, investigating, and prosecuting bribery and corruption, beyond just the Bribery and Corruption Act . The country has taken "due measures to adopt a legislative framework which is dedicated to prevent, investigate and prosecute instances of bribery and corruption" .
The Case for Criminal Investigation
Given the severity of the allegations and the substantial sums involved, both Japan and Sri Lanka have legal grounds and obligations to pursue this matter criminally.
Grounds for Japanese Action:
JICA funds are Japanese taxpayer money—accountability is owed to the Japanese public
Japan's ODA budget has faced scrutiny, with approximately ¥5.8 billion in unused ODA-related funds recently identified by Japan's Board of Audit
Japan's anti-corruption framework (UNCAC, Act on Prevention of Transfer of Criminal Proceeds) provides mechanisms for international cooperation
Japan's recent anti-corruption project in Sri Lanka demonstrates active policy interest
Grounds for Sri Lankan Action:
Criminal breach of trust provisions (Penal Code Sections 386, 388, 389, 392A)
Public Property Criminal Offences Act provides for enhanced penalties
Past judgments confirm the seriousness with which courts treat misappropriation of entrusted funds
Japan's Responsibility
Japan must take the lead and formally request a criminal investigation through its diplomatic channels, invoking its rights under UNCAC and the mutual legal assistance framework. Japanese authorities should:
Formally request Sri Lanka's CIABOC to investigate the BASL-JICA fund misappropriation
Provide documentation of the funding agreement and contract terms
Collaborate with Sri Lankan authorities through the mutual legal assistance framework
Monitor the investigation's progress and consider freezing assets if criminal proceeds are identified
If Japan does not act, it risks sending a dangerous message that international development funds can be misappropriated without consequence—undermining both ODA credibility and Japan's anti-corruption commitments.
A Call for Justice
The BASL-JICA scandal represents a breach of trust that goes beyond internal disciplinary matters. Both Japanese and Sri Lankan law provide the tools for accountability. What remains is the political will to use them.
Japanese taxpayers deserve to know their funds were used properly. The Sri Lankan legal profession—and the public it serves—deserves accountability. And the rule of law in both countries demands nothing less than a full, transparent criminal investigation.