Bangladesh: Amended AML Act Incorporates Stringent Measures

Nazmul Ahsan

The Anti-Money Laundering Act, 2011 has been made more stringent, by expanding the purview of the reporting agencies and widening the areas of suspected transactions and predicating offences.

With the change in the existing definition of "money laundering" under the act, the maximum term of imprisonment for the offence has been increased from seven years to 12 years and the minimum, from current six months to four years under the proposed new act.

The amendment to the Anti-Money Laundering Act (AMLA) was approved last Monday last at a cabinet meeting. Prime Minister Sheikh Hasina presided over the meeting.

The Act, with the proposed amendments, will be placed now at the parliament as a Bill, sources in the Ministry of Finance (MoF) said.

According to the approved act, 11 types of financial and social business entities have to report now to Bangladesh Bank (BB) regularly on their "suspected transactions."

The newly included reporting agencies which came within the ambit of mandatory reporting are-stock dealers and stock brokers, portfolio managers, security custodians, asset managers, non-profit organisations, non-government organisations, cooperatives, real estate companies, jewel and metal businessmen, trust companies, lawyers and accountants.

Presently, only banks, insurance companies, money changers and financial institutions are liable to report to the BB on any suspected transaction.

"Many financial institutions including brokerage houses and cooperatives are now the safe havens for black money and money earned through illegal means. This should be stopped," a MoF official said.

"A number of global watchdog organisations on anti-money laundering have long been putting pressure on us to bring such financial institutions under the mandatory reporting to the central bank," he added.

The new proposed act has brought under its operational jurisdiction politically exposed persons, special judges appointed under Criminal Law Amendment Act, 1958, terror financing, any wealth obtained or possessed through corruption and money siphoned off to foreign countries.

It has included six types of offences with the existing ones to be treated as predicated offences.

The new areas are-smuggling, laundering currency, robbery, human trafficking and dowry.

The existing predicated offences have also been included in the AMLA. These are: trafficking of women and children, corruption and bribery, faking currency, faking land document, extortion, forgery, illegal trade of arms, illegal trade of narcotics, abduction and murder.

Officials in the MoF said the move to upgrade the existing anti-money laundering act, 2009 has been taken to comply with the international standard.

He said, Financial Action Task Force (FATF), an inter-governmental body formed to develop and promote national and international policies to combat money laundering and terrorist financing, said in its report in 2010, Bangladesh is still non-compliant in at least 10 key areas for attaining international standard.

The FATF has strongly recommended to the government to make the current AMLA stringent to attain the global standard.

Accordingly, MoF formed a 12-member National Coordination Committee (NCC), headed by Finance Minister AMA Muhith, to update the existing anti-money laundering act.

"The US Justice Department has extended its technical cooperation for updating the act, which is now one of the global standard anti-money laundering acts," a top MoF official told the FE.

Source: FE