The Money Laundering Prevention Act, 2012 (MLPA) is a crucial piece of legislation enacted by the Government of Bangladesh to combat money laundering, prevent illicit financial flows, and promote transparency in financial transactions. It strengthens earlier laws and aligns with international standards including the recommendations of the Financial Action Task Force (FATF).
Objectives of the Act
- To prevent and control money laundering in Bangladesh.
- To identify and punish the offenders involved in laundering illicit funds.
- To ensure compliance of banks and financial institutions with AML (Anti-Money Laundering) regulations.
Definition of Money Laundering
Under MLPA 2012, money laundering includes:
- Conversion or transfer of property acquired through criminal activity.
- Concealment of the true nature, source, location, or ownership of such property.
- Acquisition, possession or use of criminal proceeds.
Key Features of the Act
1. Obligations of Financial Institutions
- Financial institutions must implement KYC (Know Your Customer) and CDD (Customer Due Diligence) procedures.
- Mandatory reporting of suspicious transactions (STRs) and cash transactions (CTRs) to the Bangladesh Financial Intelligence Unit (BFIU).
2. Role of Bangladesh Financial Intelligence Unit (BFIU)
- BFIU is responsible for receiving, analyzing, and disseminating financial intelligence.
- It acts as the central authority for AML enforcement under Bangladesh Bank.
3. Investigative Powers
- Law enforcement agencies have the power to seize property, freeze bank accounts, and investigate suspected money laundering activities.
- Special tribunals may be formed for speedy trial and punishment.
4. Punishment for Money Laundering
- Imprisonment ranging from 4 to 12 years.
- Confiscation of property involved in the offence.
- Monetary fines and disqualification from future government contracts or banking roles.
Reporting and Record-Keeping
- Banks and financial institutions must maintain transaction records for at least 5 years.
- They are required to submit regular AML compliance reports to the BFIU.
International Cooperation
The Act enables collaboration with foreign governments and organizations for investigation and intelligence sharing in cross-border money laundering cases.
Compliance Requirements
- Appointment of an AML Compliance Officer (AMLCO) in all banks.
- Training programs for staff on AML procedures and risk assessments.
- Internal audit and regular evaluation of AML effectiveness.
Recent Developments
Bangladesh Bank frequently issues circulars to update banks on new AML guidelines, thresholds for STRs, and the use of automated monitoring systems.
Conclusion
The Money Laundering Prevention Act, 2012 is a cornerstone in ensuring financial integrity and transparency in Bangladesh’s banking system. As money laundering becomes more sophisticated, compliance with this law is essential for banks, financial institutions, and professionals handling financial transactions.
