Guidance Notes on Prevention of Money Laundering

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Guidance notes on prevention of Money Laundering

Definition of Money Laundering:
A definition of what constitutes the offence of money laundering under Bangladesh law is set out in Section 2 (Tha) of the Prevention of Money Laundering Act 2002 (Act No. 7 of 2002) which is read as follows: “Money Laundering means - (Au) Properties acquired or earned directly or indirectly through illegal means; (Aa) Illegal transfer, conversion, concealment of location or assistance in the above act of the properties acquired or earned directly or indirectly through legal or illegal means.

Responsibilities of Bangladesh Bank towards Money Laundering: The Act gives Bangladesh Bank broad responsibility for prevention of money laundering and wide-ranging powers to take adequate measures to prevent money laundering, facilitate its detection, monitor its incidence, enforce rules and to act as the prosecuting agency for breaches of the Act. The responsibilities and powers of Bangladesh Bank are- ❖ To investigate into all money-laundering offences. ❖ Supervise and monitor the activities of banks, financial institutions and other institutions engaged in financial activities. ❖ Call for reports relating to money laundering from banks, financial institutions and other institutions engaged in financial activities analyze such reports and take appropriate actions. ❖ Provide training to employees of banks, financial institutions and other institutions engaged in financial activities on prevention of money laundering. ❖ To authorize any person to enter into any premises for conducting investigations into money laundering offences. ❖ Persons authorized by Bangladesh Bank to investigate offences can exercise the same powers as the Officer in Charge of Police Station can exercise under the Code of Criminal Procedure. ❖ To do all other acts in attaining the objectives of the Act. ❖ The Courts will not accept any offence under the Act for trial unless a complaint is lodged by Bangladesh Bank or any person authorized by Bangladesh Bank in this behalf.

Penalties for Money Laundering:
All offences under the Act are non-bailable and the penalties for the commission of the offences all have prison terms and/or fines as prescribed in the Act as follows: ❖ The offence of money laundering is punishable by terms of a minimum imprisonment for six months and a maximum of up to seven years plus a fine amounting to double the money laundered. ❖ The punishment for violation of Seizure Orders is a minimum imprisonment for one year or a fine of at least Taka ten thousand, or both. ❖ The punishment for violation of Freezing Orders is a minimum imprisonment for one year or a fine of at least Taka five thousand, or both. ❖ The offence of divulging information by informing i.e. tipping off the person who is the subject of a suspicion, or any third party is punishable by a minimum imprisonment for one year or a fine of at least Taka ten thousand, or both. ❖ The offence of obstructing investigations or failure to assist any enquiry officer in connection with an investigation into money laundering is punishable by a minimum imprisonment for one year or a fine of at least Taka ten thousand, or both. ❖ If any bank, financial institution and other institutions engaged in financial activities fail to retain customer identification and transaction records or fail to furnish required information as per the Act, Bangladesh Bank will report such failure to the licensing authority of the defaulting institution so that the concerned authority can take proper action for such negligence and failure. ❖ Bangladesh Bank is empowered to impose fines of not less than Taka ten thousand and not more than Taka one lac on any bank, financial institution and other institutions engaged in financial activities for the failure or negligence to retain customer...
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