SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
Cross-border transfers of personal data are permitted only if the recipient country or foreign entity ensures an adequate level of data pro - tection, or where appropriate safeguards are in place (such as standard contractual clauses or binding corporate rules). Data controllers must ensure that the rights of data subjects in Sri Lan - ka are not prejudiced by such transfers. 8.3 Role and Authority of the Data Protection Agency The Data Protection Authority of Sri Lanka is the independent regulatory body tasked with enforcing the country’s data protection regime. The Authority will play a central role in ensuring compliance with the PDPA across both public and private sectors. Its core functions include: • monitoring and ensuring compliance with the provisions of the PDPA; • investigating complaints, either upon receipt or on its own initiative; • conducting audits and inspections of data controllers and processors; • issuing binding directions, codes of practice, and guidelines to promote responsible data handling; • imposing administrative penalties and requir - ing corrective actions in cases of non-compli - ance; and • overseeing data breach notifications, includ - ing the assessment of risk and response measures. The Authority is also empowered to collaborate with international regulatory bodies and to issue adequacy decisions or approve cross-border transfer mechanisms. It acts as the primary guardian of personal data rights, ensuring that
individuals’ privacy is respected and upheld in both the public and private spheres. The Authority is expected to become fully func - tional during the transitional implementation period set out in the PDPA, after which enforce - ment powers will be exercised in full.
9. Looking Forward 9.1 Upcoming Legal Reforms
Sri Lanka is currently undergoing a significant wave of legal and institutional reforms, driven by the government’s commitment to eco - nomic recovery, fiscal transparency and good governance, particularly in line with its obliga - tions under the International Monetary Fund (IMF) programme. These reforms are designed to strengthen investor confidence, modernise regulatory frameworks and address structural weaknesses exposed by the recent economic crisis. Recent legislative initiatives have focused on: • combating bribery and corruption, with strict - er enforcement and disclosure obligations; • reforming anti-money laundering (AML) laws to align with Financial Action Task Force (FATF) standards; • introducing new legislation on public financial management and procurement; • modernising revenue administration and strengthening the independence of the Cen - tral Bank of Sri Lanka; and • enacting new laws on proceeds of crime and contract enforcement, including the digitalisa - tion of commercial courts. In the area of tax law, the 2025 Budget intro - duces key changes:
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