Consequence of Money Laundering in the Society: A Study in the context of Bangladesh

Abstract

The methods and techniques of Money Laundering (ML) and Terrorist Financing (TF) are ever evolving process and changing in response to developing countermeasures. For that reason, Financial Action Task Force (FATF), the international standard setter on Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT), has revised its 40 (forty) recommendations for AML and 9 (nine) special recommendations for CFT. In line with the international standards and initiatives, Bangladesh has also amended its Money Laundering Prevention Act (MLPA), 2002 and enacted MLPA, 2009. To combat Terrorism and Terrorist Financing Anti-Terrorism Act (ATA), 2009 has also been enacted. Both the Acts have empowered Bangladesh Bank (BB) to perform the anchor role in combating ML&TF through issuing instructions and directives for reporting agencies including Money Changers (MCs). As reporting agencies MCs are to comply with the requirements of MLPA, 2009 and any circular or instructions issued by BB from time to time. The guidance notes named 'Guidelines on Anti Money Laundering and Combating Financing of Terrorism for Money Changers are issued as per power conferred in section 23 of money Laundering Prevention Act, 2009 for proper compliance of the provisions of the said Act by the MCs in Bangladesh with immediate effect. This guidance notes along with the instructions or circulars issued by Foreign Exchange policy department, all instructions in the Guidelines for Foreign Exchange Transactions and Foreign Exchange Regulation Act, 1947 must be complied by the MCs. In accordance with the provisions of the Money Laundering Prevention Act-2012 (with amendment in 2015), Anti-Terrorism Act-2009 (with amendment in 2012 & 2013) and the Money Laundering & Terrorist Financing Risk Assessment Guidelines and Money Laundering & Terrorist Financing Risk Management Guideline issued by BFIU and is intended to ensure that all directors and employees of different banks comply with the requirements and obligations imposed on them. It indicates good industry practices in AML and CFT procedures through a proportionate, risk-based approach; and assists the banks to design and implement the systems and controls necessary to mitigate the risks of the banks being used in connection with money laundering and the financing of terrorism.