An Overview on

Anti-Money Laundering Initiatives

Debaprosad Debnath
General Manager (PRL)
Bangladesh Bank

What is Money Laundering?

Money Laundering is the process by

which proceeds from a criminal
activity are disguised to conceal
their illicit origin

concise working definition was

adopted by Interpol General Secretariat
Assembly in 1995:

Any act or attempted act to conceal or

disguise the identity of illegally obtained
proceeds so that they appear to have
originated from legitimate sources.

In lay terms Money Laundering is most often

described as;

turning of dirty or black money into clean or

white money.

If undertaken successfully, money laundering

allows criminals to legitimize dirty money by
mingling it with clean money, ultimately
providing a legitimate cover for the source of
their income. Generally, the act of conversion
and concealment is considered crucial to the
laundering process.

The term Money

Laundering originated
from Mafia owned
Laundromats in US
The term laundering is
used because, the cash
proceeds from drug sales
were actually washed
with soap and water

3 Stages of Money Laundering:

- Placement
- Layering
- Integration

Stages of Money Laundering

PLACEMENT, or physical disposal of cash proceeds
of illegal activity, the initial entry of the funds into the
financial system
LAYERING, or separating illicit proceeds from source
by creating layers of financial transactions designed
to disguise audit trail and provide anonymity
INTEGRATION, or providing apparent legitimacy to
proceeds and allow them to re-enter the economy
so that they appear to be legitimate investment
funds

PLACEMENT : EXAMPLE
Mr. Anthoni a corrupt politician earned Tk.10.00 crore
by illegal means and placed the same as under:

BANKS
6.00 crore
By opening
30 accounts
in 30 banks

FINANCIAL
INSTITUTIONS
1.00 crore
By opening
10 accounts in
10 institutions

INSURANCE
COMPANIES
2.00 crore

STOCK
EXCHANGE.
1.00 crore

By making 5
Life Policies
for Family
members

By purchasing
Shares of
Different
Companies. 9

LAYERING : EXAMPLE
Mr. Anthoni moved the money deposited in the banks
through a series of economically meaningless transactions

MTBL

UTTARA

AGRANI

RUPALI

NATIONAL

SONALI

HSBC

SCB

JANATA

PUBALI

NCCB

CITI NA

ISLAMI

AL ARAFA

HABIB
10

INTEGRATION : EXAMPLE
Mr. Anthoni formed a company namely M/S
Daffodil Textile Ltd and opened an A/C in EBL

FDRs
4.00 crore

Loans
3.50 crore

EBL
A/C No.1005522

Tk.0.50 crore > Invested in the Textile Mill < Tk.3.50 crore

Banks
5.50 crore

Insurance
2.00crore

Stock Ex.
1.00 crore

Fin. Ins..
1.00 crore
11

The Money Laundering

Process

International Initiatives
Background
- Al Capone- 1920s
- Watergate scandal-1973
- US Court- 1982
- US Law- 1986

 International Standards on ML/FT

- G-7
- Vienna Convention- 1988
- FATF (Financial Action Task Force)- 1989
- FATF 40+9 Recommendations- 1990/2001
- Palermo Convention-2000
- UN Convention against Corruption (UNCAC)
- FSRB (FATF Style Regional Bodies)- APG,
CFATF

 Other Standards
- Basel Core Principles on Banking
Supervision
- EU Directives on ML/FT
- Wolfsberg Principles
- US Bank Secrecy Act/Patriot Act

 NCCT (Non Cooperating Countries and

Territories)
FIU (Financial Intelligence Unit)
Egmont Group-1995
Mutual Evaluation-2008
International Cooperation Review
Group (ICRG) Procedure

AML Regime in Bangladesh

APG Membership- 1997
MLP Act, 2002 (30 April, 2002)
AMLD (Anti-Money Laundering Department)
(June, 2002)
Investigation- BAC/CID/ACC
MLP Ordinance, 2008
MLP Act, 2009

BANGLADESH BANKS STATUS

Bangladesh Bank established Anti-Money Laundering
Department (AMLD) for looking after the issues under the MLP
Act, 2002 (MLP Act, 2009). Now it is known as Bangladesh
Financial Intelligence Unit ( BFIU) under MLP Act, 2012.
BFIU (Prev.AMLD) instructed all the banks and financial
institutions to:
Ensure KYC requirements
Report
Keep
Set

unusual / suspicious transactions (STR)

records upto 5 years after termination of relationship

up internal control mechanism.

Report

Cash Transactions (above Tk.700,000)

FIU (Financial Intelligence Unit)

Objectives:
- To develop a central database
- To Exchange Information with other
International Agencies
- To Comply the International Standards of
AML Issues
- To become the member of EGMONT Group