Bangladesh

1. Does Bangladesh have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes, in Bangladesh any act in relation to money laundering and terrorist financing is considered as a criminal offence. The major laws which govern money laundering and terrorism financing are:

• Money Laundering Prevention Act 2012 (“MLPA”),
• Money Laundering Prevention Rules 2013 (“MLPR”),
• Anti-Terrorism Act 2009 (“ATA”) and (iv) Anti-Terrorism Rules 2013 (“ATR”) (all collectively herein referred as “AML Laws”).

The AML Laws set out offences in relation to money laundering, terrorist financing, penalties, management and monitoring.

2. To whom does the legislation apply?

The AML Laws apply to individuals and entities. Under the MLPA, an entity means any kind of legal entity, statutory body, commercial or non-commercial organisation, partnership firm, co-operative society or any organisation comprising one or more person.

3. What does the legislation prohibit?

The AML Laws prohibit committing or abetting or conspiring to commit the offences of money laundering and terrorist financing activities.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Pursuant to the section 2 (v) of the MLPA, money laundering means:

• knowingly moving, converting, or transferring property involved in an offence for the following purposes:

1. concealing or disguising the illicit nature, source, location, ownership or control of the proceeds of crime; or
2. assisting any person involved in the commission of the predicate offence to evade the legal consequences of such offence;

• smuggling money or property earned through legal or illegal means to a foreign country;
• knowingly transferring or remitting the proceeds of crime to a foreign country or remitting or bringing them into Bangladesh from a foreign country with the intention of hiding or disguising its illegal source; or
• concluding or attempting to conclude financial transaction in such a manner so as to reporting requirement under MLPA may be avoided;
• converting or moving or transferring property with the intention to instigate or assist for committing a predicate offence;
• acquiring, possessing or using any property, knowing that such property is the proceeds of a predicate offence;
• performing such activities so as to the illegal source of the proceeds of crime may be concealed or disguised;
• participating in, associating with conspiring, attempting, abetting, instigate or counsel to commit any offences mentioned above.

The underlying criminal activity or predicate offence must also be proven.

5. What level of intent or knowledge is required to establish a violation?

The AML Laws do not specifically provide the level of intent or knowledge required to establish a violation under these laws. However, as Bangladesh is a common law jurisdiction, the court will have the discretion to consider and decide what level of intent or knowledge is required to establish a violation, on a case to case basis.

6. What are the potential penalties for infringing the legislation?

Pursuant to the section 4 of the MLPA, if a person commits or abets or conspires to commit an offence under MLPA, they will be punished with imprisonment for a term of four years to 12 years. In addition, they may be fined twice the value of the property associated with the offence or BDT 1,000,000 (Taka one million) a fixed sum, whichever is higher.

If an entity commits an offence or attempts, assists or conspires to commit an offence under MLPA, the entity may be fined twice of the value of the property associated with the offence or BDT 2,000,000 (Taka two million), whichever is higher. In addition, the business licence of that entity may be cancelled. If that entity fails to pay the fine within the time limit fixed by the court, the court may impose imprisonment on the owner, chairperson, director or any senior official of the entity.

As per section 7 of the ATA, if a person is convicted under the ATA for committing terrorist financing related offences, then they will be punished with imprisonment for a term of four years to (20) years. In addition to that they may be fined twice the value of the property associated with the offence or BDT 1,000,000 (Taka one million), whichever is higher.

Further, if an entity commits any terrorist financing related offence under ATA, the entity may be fined three times the value of the property associated with the offence or BDT 5,000,000 (Taka five million) whichever is higher. In addition, the business license and registration of such entity may be cancelled. Furthermore, the owner, chairperson, director or any senior official of the entity will be punished with imprisonment for a term of four to 20 years. In addition, they may be fined twice the value of the property associated with the offence or BDT 2,000,000 (Taka two million), whichever is higher, if the person fails to prove that such offence occurred without their knowledge or they failed to give sufficient effort to resist the commission of the offence.

7. Does the legislation have extra-territorial reach?

Yes, the AML Laws are also applicable for money laundering and terrorism financing activities that are conducted outside the territory of Bangladesh.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes, as per section 25 of the MLPA, “reporting organisations” have responsibilities for preventing money laundering as follows:

• To maintain complete and correct information with regard to the identity of its customers during the operation of their accounts;
• If any account of a customer is closed, to preserve previous records of transactions of such account for at least five years from the date of such closure;
• To provide with the information maintained under clauses (a) and (b) to Bangladesh Bank from time to time, on its demand; and
• If any doubtful transaction or attempt of such transaction as defined under clause (n) of section 2 is observed, to report the matter as ‘suspicious transaction report’ to the Bangladesh Bank immediately on its account.

Under Section 16 of ATA, reporting organisations have the following reporting obligations in respect of preventing terrorist financing:

• Every reporting organisation shall take necessary measures and appropriate caution in order to identify and prevent any financial transactions which may be related to any offence under the ATA, and if any suspicious transaction is identified, the reporting organisation shall immediately report it to Bangladesh Bank.

The Board of Directors, or in the absence of the Board of Directors, the Chief Executive, (or any officer holding similar position), of each reporting organisation shall be responsible to approve and issue instructions to its officers regarding their duties and responsibilities for preventing terrorist financing offences. Further, the Board of Directors or the relevant officer shall also be responsible to ensure that all related Bangladesh Bank regulations are being complied with by the employees of such reporting organisation.

9. What are the potential penalties for failing to comply with these obligations?

Reporting organisations can be punished under MLPA for the violation of the abovementioned responsibilities. In this regard, the Bangladesh Bank may:

• impose a fine of at least BDT 50,000 but not exceeding BDT 2,500,000 on the reporting organisation; and
• in addition to the fine mentioned in clause (a), cancel the license or the authorization for carrying out commercial activities of the said organisation or any of its branches, service centres, booths or agents, or as the case may be, shall inform the registration or licensing authority about the fact so as to be relevant authority may take appropriate measures against the organisation.

If any reporting organisation fails to maintain its responsibilities, under the ATA the Bangladesh Bank may impose a fine not exceeding BDT 1,000,000 on the reporting organisation. In addition to the fine, Bangladesh Bank may also cancel the license or the authorization of the reporting organisation for carrying out commercial activities, including licences for its branches, service centres, booths or agents. Bangladesh Bank in this regard shall also inform the other relevant authorities or regulators which exercises control over the reporting organisations to take further measures as may be appropriate.

10. Who are the relevant enforcement authorities in Bangladesh and what are their contact details?

The primary enforcement authority dealing with AML in Bangladesh is the Bangladesh Financial Intelligence Unit (“BFIU”) of the Bangladesh Bank. Please find below the contact details of BFIU.

Bangladesh Financial Intelligence Unit

Bangladesh Bank

Head Office (Level-11, Annex-II Building)

Motijheel C/A, Dhaka, Bangladesh

https://www.bb.org.bd/bfiu/