Money Laundering Prevention

Act, 2012
 Objective of the Act

The primary goal of the Money Laundering Prevention Act, 2012

in Bangladesh is to:
 Prevent the misuse of the financial system for illicit purposes,
including money laundering and terrorist financing.
 Enhance the transparency and integrity of the financial system.
 Comply with international standards set by organizations like the
Financial Action Task Force (FATF), which Bangladesh is a
member of.
 Strengthen law enforcement agencies' ability to detect and
prosecute financial crimes.
 Key Provisions

Section 2:Definition of Money Laundering

 The Act defines money laundering as the process
of concealing the origins of illegally obtained
money, typically through financial transactions, so
that the proceeds appear to be derived from
legitimate sources. It also includes actions such as
concealing, disguising, transferring, or transferring
ownership of the property involved in a crime.
 Key Provisions
Section 4:Offenses Under the Act
The act criminalizes various activities associated with money laundering, including:
 Concealing or disguising the nature of criminal proceeds.
 Acquiring, possessing, or using criminal proceeds.
 International transactions aimed at laundering money.
These offenses carry significant penalties, including imprisonment and fines.
Section 4 outlines penalties for money laundering offenses:
 Offense: Money laundering is a crime.
 Penalties: Offenders face 4 to 12 years in prison and fines up to 10 million
Taka. Unpaid fines may lead to additional imprisonment.
 Asset Seizure: Court may confiscate assets linked to the crime.
 Entities: Companies involved face fines (up to 20 million Taka) and potential
registration revocation. Directors may be jailed if fines remain unpaid.
 No Precondition: Being convicted of related crimes is not required for money
laundering charges.
 Key Provisions

Section 5: Violation of Seizure Orders

Violating seizure or attachment orders may result in up to 3 years of
imprisonment or a fine equal to the property's value, or both.

Section 6: Disclosure of Information

 Unauthorized disclosure of investigation-related information is punishable by
up to 2 years imprisonment or a fine up to 50,000 Taka, or both.

Section 7: Obstruction of Investigation

 Obstructing an investigation or refusing to cooperate may lead to up to 1 year
imprisonment or a fine up to 25,000 Taka, or both.

Section 8: False Information

 Providing false information about financial sources or identities is punishable
by up to 3 years imprisonment or a fine up to 50,000 Taka, or both.
 Key Provisions

Section 9: Investigation and Prosecution

 Despite any other laws, crimes under this law will be investigated by a joint
investigation team formed by officers from multiple agencies, including the
Bangladesh Financial Intelligence Unit (BFIU), in consultation with the
government.
 These crimes will be adjudicated by a Special Judge under the Criminal Law
(Amendment) Act, 1958.
 Investigators can use powers under other laws to search and identify the
property of the accused.
 Investigative agencies must inform the BFIU about ongoing investigations
under this law.

Section 10: Special Judge's Authority

 The Special Judge can impose penalties, order further investigation, and seize
property.
 Further investigation must be completed within 6 months.
 Key Provisions

Section 11: Cognizability and Bail

 Under this law, offenses will be cognizable (police can arrest without a
warrant), non-compoundable (the offense cannot be settled through
compromise between the parties), and non-bailable (the offender is not
entitled to bail).

Section 13: Bail Conditions

 An accused person can be granted bail if:
 The complainant is given an opportunity for a hearing.
 There is insufficient evidence to prove guilt.
 The accused is a woman, child, or physically disabled, and
granting bail will not hinder justice.
 Key Provisions
Section 14 : Freezing or Attachment Order of Property
 Order Issuance: The court can freeze or attach property involved in money laundering
based on an application from the investigating agency. If specific assets can't be
identified, equivalent assets of the accused can be frozen.
 Application Requirements: The investigating agency must provide details about the
property, evidence of its criminal link, and a risk of transfer or misappropriation before
the case is resolved.
 Public Notification: The court must publish the order in the official gazette and two
national newspapers (one in Bengali and one in English).
 Information to Include: The order should include the accused's personal details. Minor
errors won’t invalidate the order.
 Restrictions on Property: During the freezing or attachment period, the property cannot
be transferred, used in transactions, or encumbered without further court orders.
 Bank Account Freezing: If a bank account is frozen, all due amounts must be deposited
into the frozen account unless the order specifies otherwise.
Section 16: Appeal Against Freezing or Attachment Order
 Affected parties can appeal a freezing or attachment order to the High Court within 30
days.
 The appellate court will hear the appeal and may issue an appropriate order.
 The original order remains in effect until the appeal is decided, unless the appellate court
changes it.
 Key Provisions
Section 17: Confiscation of Property
 If a person or entity is convicted of money laundering, the court may order the
confiscation of any property directly or indirectly linked to the crime, either within or
outside the country.
 Even during an ongoing investigation or trial, the court can order the confiscation of
property related to money laundering.
 If a convicted person is absconding or deceased after charges are filed, the court can still
confiscate the property linked to their crime.
 If a person bought the property in good faith and for a fair price, and was unaware of its
link to money laundering, the court may not confiscate the property but may order the
proceeds of the sale to be deposited into the state treasury.
 If property linked to the crime cannot be located or is no longer existent, the court can
confiscate equivalent assets of the accused or impose a financial penalty.
 The confiscation order must be sent to the person controlling the property via registered
mail and published in the official gazette and two national newspapers.
 Once confiscated, the ownership of the property transfers to the state, and the person in
possession must transfer it to the state as soon as possible.
 If crime-related property is mixed with lawful assets, the court may confiscate the entire
value or property, based on the proportion of the illegal assets involved.
 Key Provisions

Section 18: Return of Seized Property

 If an asset is seized under Section 17 and a third party (other than the guilty person/entity) has
ownership or rights over it, they may apply to the court within 30 days from the last publication
date of the seizure notice to request the return of the property.
 Upon receiving an application, the court may, after a reasonable hearing, consider the following
factors to make a decision:
 Whether the applicant had any involvement with the crime related to the seized property.
 Whether the applicant has a legitimate claim to the seized property.
 The timeline of the crime and the applicant's acquisition of the property.
 Any other relevant information the court deems necessary.
Section 19: Appeal Against Seizure Orders
 Any party dissatisfied with a court order for asset seizure can appeal to the High Court Division
within 30 days.
 Upon appeal, the appellate court will provide both parties a fair hearing and issue an
appropriate order based on its findings.
Section 20: Disposal of Seized Property
 The government, with court permission, can sell or dispose of the seized property (except those
that must be destroyed by law) through public auction or other lawful means.
 The proceeds from the sale or disposal will be deposited into the national treasury.
 Key Provisions

Section 23: Powers and Responsibilities of the Bangladesh Financial

Intelligence Unit (BFIU) in Combating Money Laundering
Powers and Responsibilities of BFIU:
 Analyze and review cash and suspicious transaction reports from reporting
institutions and collect additional relevant information if needed.
 Directly instruct reporting institutions to freeze or suspend transactions if there
are reasonable suspicions of criminal activity, for up to 30 days, extendable up
to 7 times.
 Provide instructions to reporting institutions to prevent money laundering and
periodically conduct on-site inspections.
 Organize training, meetings, and seminars to ensure the effective
implementation of the law.
 Monitor and supervise the activities of reporting institutions.
Information Sharing:
 If a law enforcement agency requests information, BFIU will provide it under
the applicable laws.
 Key Provisions
Penalties for Non-Compliance:
 Fines of up to 500,000 BDT for failure to submit verified information on time, and
failure to comply with instructions may lead to suspension of operations or registration
of the entity.
 For incorrect or false information, penalties range from 20,000 to 500,000 BDT.
 Failure to comply with BFIU directives may result in daily fines up to 500,000 BDT.
Freezing Orders:
 If a reporting institution fails to comply with freezing orders, BFIU may impose fines
equivalent to the balance of the account or up to double the amount.
Enforcement of Penalties:
 If a penalty is unpaid, BFIU may inform Bangladesh Bank to take necessary actions or
apply to the court for enforcement.
Investigation:
 Investigating agencies can collect relevant account-related documents and information
through appropriate court orders or via BFIU.
Accountability of Officers:
 The owners, directors, officers, or employees responsible for non-compliance may also
be fined or face administrative actions.
 Key Provisions
Section 24: Establishment of Bangladesh Financial Intelligence Unit (BFIU)
Formation of BFIU:
 BFIU will be an independent central body with its own seal and letterhead.
 It will have a separate office within Bangladesh Bank.
 Bangladesh Bank will provide necessary resources such as office space, staff, funds, and
administrative support.
 A full-time senior officer, appointed by the government, will lead BFIU, with administrative approval
from the Governor of Bangladesh Bank.
 The senior officer will coordinate with the government on policy-making and actions to combat
money laundering and terrorist financing.
 The officer may request additional staff and consultants as needed.
Data Sharing:
 Government, semi-government, and autonomous organizations are required to provide relevant data to
BFIU upon request or voluntarily.
Information Sharing with Other Government Agencies:
 BFIU can provide information related to money laundering or terrorist financing to other government
agencies as needed.
International Cooperation:
 BFIU may share information with financial intelligence units in other countries based on agreements
or arrangements.
 BFIU can also request similar information from other countries when necessary.
Self-Initiated Information Sharing:
 Apart from agreements, BFIU can independently share information with foreign financial intelligence
units when required.
 Key Provisions
Section 25: Responsibilities of Reporting Institutions in Preventing Money Laundering
Key Responsibilities:
 Maintain accurate and complete customer identification information when managing
accounts.
 Retain transaction details for at least 5 years after an account is closed.
 Provide the stored information to the Bangladesh Financial Intelligence Unit (BFIU) as
required.
 Report suspicious transactions or attempts to BFIU immediately.
Penalties for Non-Compliance:
 If a reporting institution violates these duties, BFIU or the regulatory authority can
impose fines ranging from 50,000 to 25 lakh BDT.
 In addition to fines, the authority can revoke the business license or registration of the
institution or its branches, service centers, or agents.
Fine Collection:
 Fines collected under these provisions will be deposited into the national treasury.
Regulatory Oversight:
 The regulatory authority must ensure compliance with these responsibilities and may
also be held accountable for any failures in oversight.
Notification of Violations:
 If a regulatory authority identifies any violations or criminal activities, they must
immediately inform BFIU.
 Key Provisions

Section 26: Agreements with Foreign States

Bilateral and Multilateral Agreements:
 The government may enter into bilateral, multilateral agreements, conventions, or other
international legal arrangements with foreign states to fulfill the purpose of this law.
Requests for Information:
 Under such agreements, the government can request necessary information from foreign states
or organizations, and they will provide verified information unless it poses a national security
threat.
Memorandum of Understanding (MoU):
 The Bangladesh Financial Intelligence Unit (BFIU) can sign MoUs with foreign Financial
Intelligence Units or other relevant bodies to request necessary information and receive verified
data, provided it does not threaten national security.
Enforcement of Foreign Court Orders:
 If a foreign court order requires the confiscation or return of property in Bangladesh, the
Attorney General's Office can request a court order to enforce it, or similarly, request assistance
from the foreign state to enforce Bangladesh's court orders.
Legal Cooperation:
 Documents obtained from foreign authorities under mutual legal assistance agreements are
admissible as evidence in Bangladesh's judicial courts, regardless of other laws.
 Key Provisions

Section 27: Commission of Offenses by Entities

 If an offense under this law is committed by an entity, the
owners, directors, managers, secretaries, or any officials,
employees, or representatives directly involved will be
considered responsible for the crime unless they can prove that
the offense was committed without their knowledge or that they
took all reasonable measures to prevent the crime.
Section 28: Protection for Actions Taken in Good Faith
 If a person suffers or is likely to suffer harm due to actions taken
in good faith under this law or its regulations, no legal action
(civil, criminal, administrative, or otherwise) can be taken
against the government, its officials, employees, the Bangladesh
Financial Intelligence Unit (BFIU), investigation agencies, or
their officers, or the reporting entities or their governing bodies
and employees.