WHAT ARE THE
Money laundering and terrorism financing laws in Bangladesh?
In Bangladesh, money laundering and terrorism financing are serious offenses and are governed by the following laws: Money Laundering Prevention Act, 2012 and Anti-Terrorism Act, 2009. The objective of the Money Laundering Prevention Act, 2012 and the Anti-Terrorism Act, 2009 in Bangladesh is to establish legal measures against money laundering and terrorism financing. These laws serve to maintain the financial system's integrity and security, through prevention, detection, and legal action against such activities.
WHAT ARE THE
Key obligations reporting entities have under Bangladeshi laws?
- Know Your Customer (KYC) policies and procedures: Identifying and verifying the identity of customers, as well as understanding their business and activities.
- Transaction monitoring and reporting processes: Identifying and reporting suspicious financial transactions to the FIU.
- Training and awareness: Training staff on AML/CFT compliance and ensuring that they are aware of the risks of money laundering and terrorism financing.
- Record-keeping obligations: Keeping records of all financial transactions for a period of at least five years.
- Self-assessment and independent testing processes: Conducting regular self-assessments to identify and address any AML/CFT compliance weaknesses.
- Cooperation in the investigation process: Cooperating with the FIU and other law enforcement agencies in the investigation of suspected cases of money laundering and terrorism financing.
WHO ARE THE
ML/TF regulators in Bangladesh and what functions do they perform?
In Bangladesh, the regulators responsible for overseeing and enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) measures are primarily:
- Bangladesh Financial Intelligence Unit (BFIU): Primary agency for receiving, processing, and analysing suspicious transaction reports.
- Bangladesh Bank: The country's central bank, overseeing compliance of all banks and non-bank financial institutions with AML/CTF measures.
- Bangladesh Securities and Exchange Commission (BSEC): Regulates the securities market, ensuring its compliance with AML/CTF regulations.
- Insurance Development and Regulatory Authority (IDRA): Oversees the insurance sector, ensuring companies comply with AML/CTF laws.
- Microcredit Regulatory Authority (MRA): Regulates microfinance institutions, ensuring their compliance with AML/CTF laws.
- Department of Cooperatives: Ensures cooperative societies comply with AML/CTF regulations.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
The penalties for non-compliance with money laundering and terrorism financing laws in Bangladesh can include the following
- Criminal Penalties:
- Imprisonment up to 7 years: Individuals found guilty under the MLPA and ATA can face a jail term of up to 7 years, depending on the severity of their crime.
- Fines of up to BDT 10 million: In addition to imprisonment, individuals can also be penalized with monetary fines up to BDT 10 million.
- Administrative Penalties:
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- Fines ranging from BDT 50,000 to BDT 5 million: Organizations that fail to comply with AML/CFT laws can face administrative fines that range from BDT 50,000 up to BDT 5 million. The exact amount depends on the severity and frequency of the non-compliance.
- Restrictions or revocation of licenses and approvals: Regulatory bodies such as the Bangladesh Bank have the authority to restrict or revoke the licenses and approvals of organizations found guilty of violating AML/CFT laws. This could severely limit the operations of the organization and potentially lead to its closure.
WHAT ARE THE
Largest fines for non-compliance with AML/CTF laws?
Bangladesh regulators have shown they are willing to take action for non-compliance with AML/CTF laws and have used their powers extensively. Below are some of the largest fines for non-compliance with anti-money laundering laws in Bangladesh:
- Unipay2u (Bangladesh, 2019) - Six high-ranking members of Unipay2u were sentenced to 12 years' imprisonment for money laundering in January 2019. Along with hefty fines, the court ordered the seizure of all properties owned by the company. Arrest warrants were issued for three absconding convicts. The case underscores the importance of rigorous anti-money laundering measures.
- HB Apparels (Bangladesh, 2018) - In 2018, two individuals associated with M/S HB Apparels were sentenced to 15 years' imprisonment for money laundering, after embezzling Tk 17 crore 38 lakh and 50,000 from Dhaka Bank using fraudulent documents. They were also fined under different sections of the penal code. The case, initiated by the Anti-Corruption Bureau, highlights the severity of financial crimes and the importance of vigilant anti-corruption measures.
- BNP Leader Case (Bangladesh, 2016) - The High Court overturned the initial acquittal verdict and sentenced a prominent BNP leader and his business associate to seven years in jail each in a money laundering case. The individuals were found guilty of siphoning off Tk 204.1 million to Singapore between 2003 and 2007. The case, filed by the Anti Corruption Commission, resulted in significant fines for the convicts and serves as a strong reminder of the judicial system's commitment to combating financial crime.
- Eight Banks (Bangladesh, 2014) - Eight Bangladeshi banks, including Islami Bank and Premier Bank Limited, were penalized under the money laundering law for not maintaining client affidavits and failing to report suspicious transactions timely. The fines ranged from Tk 200,000 to Tk 2 million. The case underscores the importance of banks complying with regulatory requirements, including Know Your Customer (KYC) protocols, to prevent financial crimes.