Kapila Chandrasena, the former CEO of Sri Lankan Airlines, stands at the center of one of the most publicized aviation corruption scandals in recent years. His name became global headline material in 2020 when he and his wife were accused of accepting millions in bribes from Airbus SE, one of the world’s largest aerospace manufacturers.

 

In December 2023, the U.S. Department of State officially designated Kapila Chandrasena under its Global Magnitsky sanctions program, citing “significant acts of corruption and misuse of public office.” The designation blocks his access to the U.S. financial system, freezes any assets under U.S. jurisdiction, and restricts others — both institutions and individuals — from doing business with him.

Background: The Airbus Scandal

The case dates back to Sri Lanka’s national aircraft acquisition in the mid-2010s. During Chandrasena’s tenure as CEO of Sri Lankan Airlines, the company entered into a deal to purchase aircraft from Airbus.

In 2020, it was revealed — through court filings and internal Airbus documentation — that Chandrasena and his wife had allegedly accepted a bribe of over $2 million in exchange for securing the Airbus deal. The funds were reportedly routed through shell companies and offshore accounts.

While the bribery charges were originally filed in Sri Lanka, global interest grew rapidly due to the extraterritorial scope of Airbus’s corruption investigations, which were being coordinated by authorities in France, the UK, and the United States.

The Sanctions: What Happened?

In December 2023, the U.S. State Department announced it had sanctioned Chandrasena under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act. The statement accused him of:

• Accepting bribes to influence public procurement decisions
• Diverting public funds for personal enrichment
• Engaging in practices that undermined institutional governance in Sri Lanka

The designation led to an immediate block on all assets within U.S. jurisdiction and prohibited all U.S. persons — including financial institutions, law firms, and companies — from dealing with him.

While he has not yet been added to OFAC’s SDN List, the practical outcome is similar, as most compliance systems flag all 7031(c)-designated individuals.

 

Consequences of the Sanctions

The impact of the sanctions has been multifaceted:

Financial System Lockout

Banks in Asia, Europe, and the Gulf Cooperation Council (GCC) countries began freezing or terminating accounts associated with Chandrasena. Even if his name isn’t on OFAC’s SDN List, most international financial institutions apply a “de-risking” strategy to avoid regulatory exposure.

Legal Complications

Chandrasena now faces asset recovery actions in Sri Lanka and scrutiny in third-party jurisdictions. International legal cooperation could lead to further forfeitures or criminal proceedings.

Reputational and Diplomatic Fallout

With ties to one of Asia’s key aviation programs, Chandrasena’s downfall adds fuel to Sri Lanka’s wider corruption crisis. Sanctions from the U.S. have also strained efforts to attract foreign investment into the country’s airline and tourism sectors.

 

Is Sanctions Reversal Possible?

Though challenging, individuals sanctioned under Section 7031(c) or similar corruption-related programs can request removal, especially if due process was lacking, facts were misinterpreted, or evidence is presented of remedial actions taken.

Here’s how that process could theoretically unfold for someone in Chandrasena’s position:

1. Filing a Request for Delisting

Although the 7031(c) process doesn’t go through OFAC, the sanctioned party can petition the U.S. State Department with a formal request for reconsideration. This request should include:

• A detailed rebuttal of the specific allegations
• Documentation of financial transparency and reforms
• Evidence of disengagement from public office or political activity
• Independent audit or investigation results

2. International Arbitration or Civil Challenge

If the asset freezes impact property or funds in the UK or EU, Chandrasena may attempt to challenge them in civil court, asserting that:

• The sanctions are disproportionate
• No court of law has convicted him
• Due process was not observed in applying the designation

3. Public Transparency and Legal Reform

To shift perception and support his legal case, Chandrasena could:

• Commission and publish an independent compliance audit
• State cooperation with authorities
• Publicly distance himself from former roles or entities under investigation.

These steps help frame the narrative around accountability and reform, often a crucial factor in sanctions relief.

4. Engage in International Mediation or Political Dialogue

Sanctions involving corruption in state enterprises often intersect with politics. If the government of Sri Lanka initiates structural reforms or legal action, U.S. authorities may be open to reassessing the status of individuals like Chandrasena, particularly if he becomes cooperative.

 

Legal Strategy Framework

To make any of this work, a strong legal team would need to:

• Coordinate with U.S. sanctions attorneys
• Liaise with Sri Lankan legal authorities
• Identify blocked funds and challenge freezes on a case-by-case basis
• Communicate through diplomatic or trade channels, if applicable

While the process may be long, sanctions relief is a recognized legal pathway, not a closed door. At this stage, guidance from a seasoned legal strategist like Lionel Iruk, Esq., General Counsel at Empire Global, can be crucial for crafting jurisdiction-specific petitions and international cooperation pathways.

 

Lessons for Executives and Officials

Chandrasena’s case is a cautionary tale. Whether or not the allegations are fully proven, the impact of sanctions can destroy global mobility, finances, and legitimacy.

For executives in state-run or politically connected industries:

• Avoid even the appearance of impropriety in procurement deals
• Use transparent payment and tender processes
• Maintain independent legal and compliance oversight

For business leaders facing similar sanctions, Empire Global and Lionel Iruk, Esq. offer a path to recovery by building transparent legal narratives and advocating internationally.

Kapila Chandrasena’s sanctions are a reminder that the U.S. and its allies now treat corruption as a global crime — not a domestic issue. But sanctions are not always final. With the right strategy, some individuals can negotiate, reform, or legally challenge their way toward removal.