Financial Crime World

Implementing Effective Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Practices

Key Principles of AML/CFT in Designated Non-Financial Business and Professions (DNFBPs)

  • Customer Due Diligence (CDD): Businesses must know their clients, understand the nature of transactions, and verify sources of funds.
  • Record Keeping: Businesses should maintain accurate records to facilitate CDD, transaction monitoring, and reporting suspicious activities.
  • Suspicious Transaction Reporting (STR): Businesses must report suspicious transactions to regulatory authorities, such as the Bangladesh Financial Intelligence Unit (BFIU).
  • Internal Controls: Businesses should establish and maintain internal policies, procedures, and controls to prevent money laundering and terrorist financing.
  • Compliance Officer: Designate a compliance officer at the management level to oversee implementation of AML/CFT policies and procedures.
  • Training and Capacity Building: Provide employees with training on AML/CFT practices and ensure they are aware of their roles in preventing money laundering and terrorist financing.

Role of the Bangladesh Financial Intelligence Unit (BFIU)

The BFIU is responsible for:

  1. Receiving STRs: The BFIU receives suspicious transaction reports from various sources.
  2. Analyzing STRs: The BFIU analyzes the received STRs to identify potential money laundering or terrorist financing activities.
  3. Disseminating Results: The BFIU disseminates the results of its analysis to law enforcement and competent agencies, such as the Police and Anti-Corruption Commission.

Responsibilities of Regulators and Self-Regulatory Organizations (SROs)

  • Issuing Industry Practice Papers: SROs may issue industry practice papers on governance, integrity, and AML/CFT issues.
  • Checking Compliance: Regulators and SROs should check compliance with AML/CFT regulations during their regular programs and notify the BFIU if there are any concerns.

Conclusion

The implementation of AML/CFT practices in DNFBPs is crucial to prevent money laundering and terrorist financing. Businesses, regulators, and SROs must work together to establish and maintain effective internal controls, provide training and capacity building, and ensure strict confidentiality when reporting suspicious activities.