HOW TO COMBAT MONEY LAUNDERING
One of the best methods of preventing and deterring money laundering and terrorist financing is a sound knowledge of a customer’s business and pattern of financial transactions and commitments. The adoption of “know your customer” is not only a principle of good business but is also an essential tool to avoid involvement in money laundering.
Efforts to combat money laundering largely focus on those points in the process where the launderer’s activities are more susceptible to recognition and have therefore to a large extent concentrated on the deposit taking procedures of banks i.e. the placement stage.
Institutions and intermediaries must keep transaction records that are comprehensive enough to
establish an audit trail. According to the Money Laundering Prevention Act, 2012, banks should do the following to discharge his responsibilities to prevent money laundering
Money Laundering Prevention Act, 2012 requires all reporting agencies to maintain correct and concrete information with regard to identity of its customer during the operation of their accounts.
A risk management system shall have to be introduced to identify risks associated with the accounts opening and operating of PEPs;
Take reasonable measures to establish the source of wealth and source of funds; Ongoing monitoring of the transactions have to be conducted; and
The FIs should observe all formalities as detailed in Guidelines for Foreign Exchange Transactions while opening accounts of non-residents;
Maintain Transaction profile of every customer.
If transaction of 10(ten) lac and above occurs in an account on a particular date the account should be reported to the AMLD, Bangladesh Bank as per prescribed format.
The accounts which scores are >=14 as per risk categorization are considered as high risk accounts. KYC
Profiles and transaction Profiles must be updated and re-approved at least half-yearly for “High Risk”
accounts.
Suspicious Transaction Report is to be submitted by financial institutions to the competent authorities.
In Bangladesh, compliance requirements for FIs, as reporting organization, are based on Money Laundering Prevention Act (MLPA), 2012, Anti terrorism (Amendment) Act, 2012 and circulars or instructions issued by BFIU.
According to section 25 of MLPA, 2012 FIs‘responsibilities to prevent money laundering are -
a) to maintain complete and correct information with regard to the identity of its customers during the operation of their accounts
b) to preserve previous records of transactions of any customer’s account for at least 5(five) years from the date of closure; (For details please consult Chapter no 8)
c) to provide with the information maintained under clauses (a) and (b) to Bangladesh Bank from time to time, on its demand;
d) if any suspicious transaction or attempt of such transaction as defined under clause (z) of section 2
is observed, to report the matter as ‘suspicious transaction report’ to the Bangladesh Bank immediately on its own accord.