Financial Crime World

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) in Bangladesh

Key Aspects of AML/CFT Policies

AML/CFT policies are essential for preventing the misuse of financial systems by individuals and organizations involved in money laundering and terrorist financing activities. Here are some key aspects of these policies:

Customer Due Diligence (CDD)

Businesses must verify the identity of their customers, including:

  • Name: Full name as it appears on government-issued identification.
  • Address: Residential or business address as it appears on government-issued identification.
  • Date of birth: Date of birth as it appears on government-issued identification.
  • National ID number: Unique identifier issued by the government.
  • Occupation/Profession: Self-reported occupation or profession.

Record Keeping

Businesses must maintain accurate and detailed records of customer transactions, including:

  • Transaction details: Amount, date, time, and purpose of transaction.
  • Customer information: Customer name, address, national ID number, and occupation/profession.
  • Purpose of transaction: Reason for the transaction.

Suspicious Transaction Reporting (STR)

Businesses must report suspicious transactions to the relevant authorities, including:

  • Description of transaction: Detailed description of the transaction.
  • Reason for reporting: Reason why the transaction is suspected to be related to money laundering or terrorist financing.

Internal Controls

Businesses must implement internal controls to prevent money laundering and terrorist financing, including:

  • Designating an AML/CFT compliance officer: Appointing a person responsible for ensuring AML/CFT compliance.
  • Providing training to employees: Educating employees on AML/CFT policies and procedures.
  • Conducting regular audits: Regularly reviewing financial transactions and records to ensure compliance with AML/CFT regulations.

Role of the Bangladesh Financial Intelligence Unit (BFIU)

The BFIU plays a crucial role in implementing AML/CFT policies and procedures in Bangladesh. Its responsibilities include:

  • Receiving STRs: Receiving reports from businesses on suspicious transactions.
  • Analyzing STRs: Analyzing reports to identify potential money laundering or terrorist financing activities.
  • Disseminating results: Sharing the results of its analysis with law enforcement agencies for further action.

Role of Regulators and Self-Regulators

Regulatory bodies, such as the Ministry of Commerce and the Institute of Chartered Accountants Bangladesh (ICAB), play a crucial role in implementing AML/CFT policies. Their responsibilities include:

  • Issuing industry practice papers: Publishing guidelines on governance and integrity.
  • Conducting regular programs: Regularly checking compliance with AML/CFT requirements and notifying the BFIU if there are any concerns.

Implementation Challenges

Implementing AML/CFT policies can be challenging for DNFBPs due to:

  • Lack of resources: Limited financial resources, technology, or expertise.
  • Capacity building: Insufficient training or education on AML/CFT policies and procedures.
  • Cultural change: Difficulty adapting to new policies and procedures.

To prevent money laundering and terrorist financing, businesses must start practicing CDD, record keeping, STR, and internal controls now.