Anti-Money Laundering Legislation in Bangladesh
First anti-money laundering legislation of the country is Money Laundering Prevention Act, 2002, which was effective from 7th April,2002 to 14th April,2008. It was replaced by the Money Laundering Prevention Ordinance on 15th April,2008; subsequently, the ordinance was passed by the national parliament and Money Laundering Prevention Act,2009 was enacted giving effectiveness from 15th April, 2009 (Gazette Notification:24th Feb,2009).
What is Money Laundering: Classic View
The process by which one conceals the existence, illegal source or illegal application of income, and then disguises that income to make it appear legitimate. That is, the money-launderer is converting his dirty money to clean money.
Reverse Money Laundering
The act of transferring/placing legitimate money and assets into an underground criminal network to support criminal activity. That is, one who is investing his clean money to dirty activities, he is laundering money.
Motivations for Laundering Money
There are numerous motivations for laundering money. Some notables are:
(a) Avoid revealing involvement in the underlying crime;
(b) Hide it so that the Government can’t take it away;
(c) Criminal needs it for future illegal activity;
(d) Be able to spend it!
Kinds of Criminals Launder money
Situations depend on country to country. In Bangladesh, mainly the following categories of persons are associated with money laundering –
(a) Public officials who receive bribes;
(b) Businessmen to finance smuggling, under-invoicing, over-invoicing;
(c) Human traffickers;
(d) Migrants to transfer assets;
(e) Drug dealers and terrorist financers.
Definition of Money Laundering as per section 2(L) of Money Laundering Prevention Act, 2002
In the earlier Act on anti-money laundering, two categories of activities were defined as money laundering, namely:
(a) Earned or acquired assets directly or indirectly through illegal means.
(b) Transfer, conversion, concealment of whereabouts of earned/acquired assets, which was earned directly or indirectly through illegal means, or assisting such activities.
Definition of Money Laundering as per section 2(k) of Money Laundering Prevention Act,2009
Four categories of activities have been defined as money laundering in the present Act, namely:
(a) Transfer, conversion, remitting abroad or bring from abroad to Bangladesh the proceeds or properties acquired through commission of a predicate offence, for the purpose of concealing or disguising the illicit origin of the money or property;
(b) Illegal remitting abroad of money or properties acquired/earned through legal or illegal means.
(c) To conduct, or attempt to conduct a financial transaction with an intent to avoid reporting requirements.
(d) To do or attempt to do such activities so that the illegitimate source of the fund or property can be concealed or disguised or knowingly assist to perform or conspire to perform such activities.
In brief, four categories of activities that are defined as money laundering in the new Act are:
(a) Transfer, conversion, remitting to and from Bangladesh involving proceeds of a predicate offence.
(b) Illegal remitting abroad of legally/illegally earned money/property.
(c) Transaction to avoid reporting requirements.
(d) To assist such activities.
List of Predicate Offences as per section 2(q)
Corruption and bribery;
Business of illegal arms;
Illicit dealings of narcotics, drugs and psychotropic substances;
Illicit dealings of stolen and other goods;
Kidnapping, illegal detention, hostage-taking;
Murder, grievous bodily injury;
Woman and child trafficking;
Smuggling and cross-border transfer of local and foreign currency;
Robbery or theft;
Trafficking human and illegal immigration;
Any other offence declared by Bangladesh Bank.
Reporting Agency as per section 2(L)
As we have seen that transaction to avoid reporting requirements has been defined as money laundering. Let us now see who are to reports, that is, which are reporting agencies:
(a) Bank/Financial Institutions;
(b) Insurance Companies;
(c) Money changers;
(d) Companies remitting money;
(e) Any such organization declared by Bangladesh Bank.
Responsibilities of Reporting Agency
Let us now see what are to be reported by the reporting agency:
(a) Keeping full information of its’ clients (KYC);
(b) Inform Bangladesh Bank proactively and immediately on suspicious transactions likely to be related to money laundering.
Suspicious Transaction as per section 2
Reporting agencies are to report suspicious transaction. Section 2 defines suspicious transaction as:
(a) Transaction that substantially deviates from usual transaction;
(b) Reasonable cause to believe that the transaction is related to any proceeds of crime.
Investigation and Trial under Money Laundering Prevention Act, 2002
As per section 5 of the Money Laundering Prevention Act, 2002, investigation was to be done by the Bangladesh Bank or any person authorized by Bangladesh Bank. And as per section 6 of the Money Laundering Prevention Act, 2002, all Session Judges were empowered for trial of money laundering cases.
Investigation and Trial under Money Laundering Prevention Act, 2009
Followings are the notable features of investigation and trial process under the Money Laundering Prevention Act, 2009:
(a) As per section 11, offences under the Act shall be cognizable, non-compoundable, non-bailable.
(b) Any individual may provide information to file First Information Report about the commission of a money laundering occurrence to the police station as per section 154 of CrPC.
(c) Offences under the Act considered as scheduled offences of the Anti-Corruption Commission Act, 2004; therefore, such offences can be investigated only by ACC (Section 9(1).
(d) To be tried by the Special Judge (Section 10).
Bank Account Freeze by Bangladesh Bank
Bangladesh Bank can issue order to any Bank/Financial Institutions to freeze an account for 30 days (can be extended further 30 days) where there are grounds to suspect that the transaction involves proceeds of crime (Section 23©). Special Judge can order continuation of such freezing (Section 10).
Freezing and Attachment of Property (Section 10)
Upon application of the investigating organization, the Court may give order of attachment of property, wherever situated, within or outside Bangladesh. Mutual Legal Assistance Request (MLAR) through the Attorney General Office is needed if the property is in outside of Bangladesh.
Punishment as per section 4(2)
Punishment for money laundering offences is imprisonment for a term not less than six months and not exceeding seven years. In addition, property involved with the offence shall be forfeited in favor of the state.
Bangladesh Bank: Keeping database and analyze facts provided by the reporting organizations. Giving direction to the reporting organization and monitoring their activities. Usually these are done by the Money Laundering Prevention Unit of Bangladesh Bank.
Financial Intelligence Unit (FIU) of BB: Exchanging information about suspicious transaction with FIU of other countries on the basis of signed contract.
Ministry of Home Affairs and Attorney-General Office: Central authority for MLAR.
Anti-Corruption Commission: Investigating Organization.
Burden of Proof/Evidence
There is no such provision in the Money Laundering Prevention Act that burden of proof lies with the accused. Collecting evidence of corroborative elements with predicate offences is important to prosecute. However, as per section 7 of the Criminal Law Amendment Act, 1958, when any person is charged of possessing pecuniary resources or property which is disproportionate to his known sources of income, for which he cannot satisfactorily account, it may be taken as a relevant fact in deciding whether he is guilty of the particular offence with which he is charged.
Bulk Cash Smuggling
Bulk cash smuggling cases are being prosecuted under section 16 of The Customs Act, 1969 and section 8(1) and 8(2) of The Foreign Exchange Regulation Act,1947