INTRODUCTION
The goal of most criminal acts is to generate profit for the individual or group Money laundering is the processing of these criminal proceeds to disguise their illegal origin. The criminal involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. They disguise the sources, change the form, or move the funds to a place where they are less likely to attract attention.The processes by which criminally derived property may be
laundered are extensive. Thoughcriminal money may be successfully laundered without the assistance of the financial sector,the reality is that hundreds of billions of dollars of criminally derived money is launderedthrough financial institutions, annually. The nature of the services and products offered by thefinancial services industry (namely managing, controlling and possessing money andproperty belonging
to others) means that it is vulnerable to abuse by money launderers.
NATURE
Money laundering is the practice of disguising the origins of illegally-obtained money. Ultimately, it is the process by which the proceeds of crime are made to appear legitimate. The money involved can be generated by any number of criminal acts, including drug dealing, corruption, accounting fraud and other types of fraud, and tax evasion. The methods by which money may be laundered are varied and can range in sophistication from simple to complex.
DEFINITION
Launderer is someone who earn black money through doing illegal work and worst to convene it into white money. Money Laundering is process by which illegal funds, Assets and money are convicted into legitimate funds, Assets and money. Money Laundering is the process of taking money obtained through illegal activity with the intent to conceal its origin. Essentially meaning “dirty money” is moved through a series of processes to make the money appear “clean”, in effect this distances the money from the crime. Money Laundering can also be described as the way some criminals choose to use the legitimate financial system to try to hide or disguise the proceeds of crime.
HISTORICAL DEVELOPMENT
Money laundering is the process by which proceeds from a criminal activity are disguised to conceal their illicit origins in order to “legitimize” the ill-gotten gains or wealth. Money laundering is considered an offence, because it has potentially devastating economic, security, and social consequences. It is an avenue for drug dealers, smugglers, terrorists, illegal arms dealers, corrupt public officials, and others to operate and expand their criminal enterprises. It can also adversely affect collection of government revenue and deprives the government of due revenues. To prevent money laundering in Bangladesh, the Prevention of Money Laundering Act, 2002 (Act No. VII of 2002) was enacted. The provisions of the said Act having been found insufficient to prevent money laundering effectively in the year 2008, the non-party caretaker government promulgated an Ordinance in this respect (Ordinance 12 of 2008). This was examined by the newly elected government led by the Awami League in 2009. After due process of law-making, the Prevention of Money Laundering Act, 2009 (Act No. 8 of 2009) was enacted. The Act consists of 31 sections and repeals the earlier Ordinance of 2008. However, it protects all acts done or action taken under the preceding Ordinance. The object of the Act is to provide for continuity of the law and actions taken earlier. . In 2012, government again replace it with the Money Laundering Prevention Act, 2012. The main objective of the 2012 Act is to tackle the illegal money transfer to different countries. In order to exercise the powers, and perform the duties, vested in Bangladesh Bank, a separate unit named Bangladesh Financial Intelligence Unit (BFIU) has been established within Bangladesh Bank. The Money Laundering Prevention Act, 2012 has elaborated the types of reporting agencies required to report suspected transactions to Bangladesh Bank. Reporting organizations coming within the purview of mandatory reporting include, among others, banks, financial institutions, insurers, money changers, any company or institution which remits or transfers money or money value, stock dealers and stock brokers, portfolio managers, security custodians, asset managers, non-profit organizations, non-government organizations, cooperatives, real estate companies, dealers in precious metals and stones, trust companies, lawyers and accountants. Bangladesh bank has significant powers and responsibilities in restraining and preventing the offence of Money Laundering.
ESSENTIALS
Money laundering is essential for criminal organizations to use illegally obtained money effectively. The money laundering process usually consists of three steps: placement, layering, and integration.
- Placement: The first entry of illegal money into the financial system is its settlement.
- Layering: This step hides the source of money through a series of transactions and bookkeeping tricks.
- Integration: The money laundered is withdrawn from the legitimate account to be used, and the money is returned to the criminal from the legitimate source.
Not only these three methods of money laundering but also There are methods other than
EXISTING LAWS
In 2002, Bangladesh enacted the Money Laundering Prevention Act (“MLPA”), which applies to all forms of money laundering. Under the MLPA, money laundering is a non-bail able crime. . In 2012, government again replace it with the Money Laundering Prevention Act, 2012.
Section-2(v) defines Money Laundering. This section states that “Money Laundering” means –
- knowingly moving, converting, or transferring proceeds of crime or property involved in an offence for the following purposes:-
1. concealing or disguising the illicit nature, source, location, ownership or control of the proceeds of crime.
2. assisting any person involved in the commission of the predicate. [3]
- offence to evade the legal consequences of such offence
- smuggling money or property earned through legal or illegal means to a foreign country
- knowingly transferring or remitting the proceeds of crime to a foreign country or remitting or bringing them into Bangladesh from a foreign country with the intention of hiding or disguising its illegal source.
- concluding or attempting to conclude financial transactions in such a manner so as to reporting requirement may be avoided.
- converting or moving or transferring property with the intention to instigate or assist for committing a predicate offence.
- acquiring, possessing or using any property, knowing that such property is the proceeds of a predicate offence.
- performing such activities so as to the illegal source of the proceeds of crime may be concealed or disguised.
- participating in, associating with, conspiring, attempting, abetting, instigate or counsel to commit any offences mentioned above.
Section-4 talks about Offence of money laundering and punishment. This states that money laundering is a serious offence and it’s punishment of at least 4 years but not exceeding 12 years imprisonment and a fine equivalent to the twice of the value of the property involved in the offence or 10 lacks taka, whichever is greater.
Section -5 talks about Punishment for violation of an order for freezing or attachment. This section states that Any person who violates a freezing or attachment order issued under this Act shall be punished with imprisonment for a term not exceeding 3 (three) years or with a fine equivalent to the value of the property subject to freeze or attachment, or with both.
Section-6 talks about Punishment for divulging information. This section states that nobody shall with an ill motive, divulge any information relating to the investigation or any other related information to any person, organization or news media. Any person, institution or agent empowered under the shall refrain from using or divulging any information collected, received, retrieved or known by the person, institution or agent during the course of employment or appointment, or after the expiry of any contract of service or appointment for any purpose other than the purposes of this Act. This section further said that any person who contravenes will be punished with imprisonment for a term not exceeding 2 (two) years or a fine not exceeding taka 50 (fifty) thousand or with both.
Section -7 talks about punishment for obstruction or non-cooperation in investigation, failure to submit report or obstruction in the supply of information. This section said that Any person who obstructs or declines to cooperate with any investigation officer for carrying out the investigation or declines to supply information or submit a report being requested without any reasonable ground shall be deemed to have committed an offence .Again this section said that Any person who is convicted shall be punished with imprisonment for a term not exceeding 1 (one) year or with a fine not exceeding taka 25 (twenty five) thousand or with both.
Section-8 talks about Punishment for providing false information. This section states that nobody shall knowingly provide false information in any manner regarding the source of fund or self identity or the identity of an account holder or the beneficiary or nominee of an account. Further this section said that any person who violates shall be punished with imprisonment for a term not exceeding 3 (three) years or a fine not exceeding taka 50 thousand or with both.
Section-9 talks about Investigation and trial of an offence. This section states that other law, the offences shall be considered as the scheduled offences under the Anti Corruption Commission Act, 2004 and shall be investigated by the Anti Corruption Commission or any officer of the Commission empowered by it in this behalf or any officer of any other investigating agency authorized by the Anti Corruption Commission.
Section-10 talks about Extra-ordinary jurisdiction of the special judge. This section states that the special judge may impose such punishments as are specified for the offences and where appropriate, may pass any other necessary order including orders for further investigation, freezing, attachment and confiscation of property. If the special judge passes an order for further investigation of any case filed, he shall specify a time-limit which shall not exceed 6 months directing the investigation officer to submit his investigation report.
Section-11 talks about cognizancy, non-compoundability and non-bail ability of offences. This section states that this offences shall be cognizable, non-compoundable and non-bailable.
Section-12 talks about Inevitability of the approval of the Anti Corruption Commission. This section states that the Code of Criminal Procedure or any other law for the time being in force, no court shall take cognizance of any offence, except with the approval of the Anti Corruption Commission. [4]
After concluding the investigation, the investigation officer shall take prior approval of the Anti-Corruption Commission before submitting his report and shall submit a copy of the approval before the court along with the report.
Section-13 talks about Provisions relating to bail. This section said that Any person accused shall be released on bail, if the complainant is given an opportunity of being heard on the application for bail, the court is not satisfied that there are reasonable grounds to believe that the accused shall be found guilty of the charges brought against him and the accused is a woman, child or physically disabled person and the court is satisfied that justice may not be hindered by reason of releasing him on bail.
Section-14 talks about Orders to freeze or attach property. This section states that the court may, on the basis of a written application by the Anti Corruption Commission or any person or organization authorized by it, issue an order to freeze or attach the property, within or outside the country, involved in money laundering or any other offence. At the time of making a written application before the court for an order to freeze or attach any property, the Anti Corruption Commission or any person or organization authorized by it shall mention the following information in the application.
Namely:
- Full description of the property for which an order for freezing or attachment is sought.
- grounds and primary evidence in support of the property for being attachable due to its involvement in money laundering or any other offence.
- The apprehension that the property may be transferred or taken beyond possession before the disposal of the complaint, if an order is not passed by the court according to the application.
Section-15 talks about Return of frozen or attached property. This section states that if any court makes an order to freeze or attach any property under section 14 and any person or entity other than the accused person or entity has an interest in that property, the person or the entity may make an application before the court for the return of the property within 30 (thirty) days of the publication of the notice on the order to freeze or attach the property. This section further said that if any person or entity makes an application before the court, the following information shall be mentioned in the application:-
- the property is not involved directly or indirectly in money laundering or any predicate offence
- the applicant is not involved directly or indirectly in the alleged money laundering or any other predicate offence
- the applicant is not acting as a nominee of, or on behalf of, the accused person
- the accused person or entity has no proprietary right, interest or ownership with regard to the frozen or attached property and
- The applicant has a proprietary right, interest and ownership in the frozen or attached property.
Section-16 talks about Appeal against the order to freeze or attach property. This section states that any person or entity aggrieved by an order for freezing or attachment of any property, passed by a court may prefer an appeal against such order before the High Court Division within 30 days. If an appeal is preferred the appellate court shall give the parties reasonable time for being heard, and at the end of hearing, may pass such order as it deems fit.
Section-17 talks about Confiscation of property. This section states that If any person or entity is convicted of the offence of money laundering, the court may pass an order for confiscation of any property, within or outside the country, involved directly or indirectly in money laundering or predicate offence in favour of the State. During an inquiry and investigation or prosecution relating to an offence of money laundering, the respective court may, where necessary, pass an order for the confiscation of any property situated within or outside the country in favour of the State. If any person convicted of the offence of money laundering absconds or dies after submitting the charge sheet, the court may pass an order for confiscation of that person’s property which was involved in the money laundering or predicate offence in favour of the State.
Explanation– A person shall be deemed to have absconded for the purposes of this section where the person, despite adequate measures being taken, fails to surrender before the court within 6 months of issuance of the warrant of arrest, or it is not possible to arrest the person within the period.
Section-18 talks about Return of confiscated property. This section said that If a court pass an order of confiscation of any property under section 17 and any person or entity other than the convicted person has any title, interest or right in the property, the person or the entity may make an application before the court for the return of the property within 30 days of the publication of the notice of confiscation of the property in newspaper. [5]
This section further said that If any application is received , the court shall give a reasonable time to the person who filed the case, the convicted person or entity and the applicant to be heard and after hearing, the court may pass necessary order considering the following matters, namely:
- Whether the applicant or the confiscated property or any part thereof had any involvement in the commission of the offence.
- whether the applicant has a valid right to acquire the confiscated property
- the duration of the commission of the offence and the duration of alleged ownership of the confiscated property by the applicant and
- Any other information deemed to be relevant by the court.
Section-19 talks about Appeal against any order for confiscation. This section states that If any court pass an order for confiscation of any property, the party aggrieved by such an order may prefer an appeal against the order before the High Court Division within 30 days. If an appeal is preferred under, the appellate court shall give both the parties reasonable opportunity of being heard and may on conclusion of such hearing, pass such orders as it deems fit.
Section-20 talks about Procedure for disposal of confiscated property. This section states that if any property is confiscated, the Government may, subject to the permission of the court, sell, in any other way, dispose of such property other than the property which is required to be destroyed under any other law, by means of an open auction or by any other commercially profitable and lawful means. The proceeds of the sale or disposal of the property in any other legal manner shall be deposited into the treasury of the State.
Section-21 talks about appointment of a manager or caretaker for taking care of the frozen, attached or confiscated property. This section states that If any property is frozen, attached or confiscated, the court may upon an application of the investigation agency or any person authorized by it in this behalf, appoint any law enforcement agency as a manager or caretaker of the property to take control, manage, look after or, in any other manner, deal with the total property or any part thereof under such terms and conditions as the court may deem fit.
Section-22 talks about Appeal. This states that any party aggrieved by an order, judgment, decree or sentence passed by a court may prefer an appeal before the High Court Division within 30 (thirty) days from the date of such order, judgment, decree or sentence.
Section-23 talks about Powers and responsibilities of Bangladesh Bank in restraining and preventing the offence of money laundering. This section states that Bangladesh Bank shall have the following powers and responsibilities. Such:-
- to analyze or review information related to cash transactions and suspicious transactions received from any reporting organization and to collect additional information relating thereto for the purpose of analyzing or reviewing from the reporting organizations and maintain data on the same.
- to provide with the said information to the relevant law enforcement agencies for taking necessary actions.
- ask for any information or obtain a report from reporting organizations with regard to any transaction in which there are reasonable grounds to believe that the transaction involves in money laundering or a predicate offence.
- to issue an order to any reporting organization to suspend or freeze transactions of any account for a period not exceeding 30 (thirty) days if there are reasonable grounds to suspect that any money or property has been deposited into the account by committing any offence, Provided that such order may be extended for additional period of a maximum
of 6 (six) months by 30 (thirty) days, if it appears necessary to find out correct information relating to transactions of the account.
- issue, from time to time, any directions necessary for the prevention of money laundering to the reporting organizations;
- monitor whether the reporting organizations have properly submitted information and reports requested by Bangladesh Bank and whether they have duly complied with the directions issued by it, and where necessary, carry out on-site inspections of the reporting organizations to ascertain the same;
- arrange meetings and seminars including training for the officers and staff of any organization or institution, including the reporting organizations, considered necessary for the purpose of ensuring proper implementation of this Act by Bangladesh Bank;
- carry out any other functions necessary for the purposes of this Act.[6]
Section-25 talks about Responsibilities of the reporting organizations in prevention of money laundering. This section states that the reporting organizations shall have the following responsibilities in the prevention of money laundering.
Such as:-
- to maintain complete and correct information with regard to the identity of its customers during the operation of their accounts
- if any account of a customer is closed, to preserve previous records of transactions of such account for at least 5(five) years from the date of such closure
- to provide with the information maintained to Bangladesh Bank from time to time, on its demand
- if any doubtful transaction or attempt of such transaction as defined under clause (n) of section 2 is observed, to report the matter as “suspicious transaction report” to the Bangladesh Bank immediately on its own accord.
IMPORTANCE
Money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source. The importance of the anti-money laundering legislation include:
- preventing persons from profiting from criminal conduct and thereby making crime less attractive.
- protecting financial institutions from inadvertent involvement in money laundering, which could damage the business.
- encouraging foreign direct investment and economic growth through successful capital market development and better positioning Bangladesh in the global financial marketplace.
REALITY
The country’s economy is suffering badly as thousands of crores of taka are being smuggled abroad through fraudulent means. The money which could have been invested in the country’s ongoing development is being laundered from the country by corrupt individuals. The government has taken several initiatives to stop these activities as it is having a negative impact on the country’s overall economy. Local investment is being affected due to illegal money transfer, which leads to a shortage in employment opportunities. [7]
Therefore it is imperative to stop money laundering. In order to deter criminals from illegally transferring money, strict penalties must be given to those who are caught doing so. Already there are many legal provisions for stopping illegal money transfer, but they are not being implemented properly. In many cases, the money is generated through corruption and smuggled abroad. However, the government can take legal the initiative to bring back the money by collaborating with foreign authorities.
The government has taken several initiatives to stop these activities as it is having a negative impact on the country’s overall economy
Different government agencies, including law enforcement agencies, are working hard to prevent money laundering. A financial intelligence unit has been formed at Bangladesh Bank which is working around the clock to prevent illegal money transfers. However, the private banking sector needs to cooperate with the public sector in order to become more efficient at blocking money laundering. Officials at each and every bank must be trained to spot unusual transactions and alert the authorities accordingly. Further cooperation from foreign government is needed to bring crooks to justice and bring back the money to the country. Moreover, the government is also working to improve coordination within its internal agencies. A Central Coordination Taskforce has been set up to stop money laundering, prevent financing of terrorist activities and bring back the money already transferred outside the country.
EVALUTION
Money laundering is a term for process used by criminals in order to hide the source of funds that come from illegal activities or criminal offence. With the technological development, various types of offences are increases rapidly and money laundering is one of those which are increasing at an alarming rate in Bangladesh. Money laundering has potentially devastating economic, security and social consequences. [8]It provides the fuel for drug dealers, corrupt public officials and others to operate and expand their criminal enterprises. Generally money is laundered through currency exchange, stock brokerage houses, gold dealers, casinos, automobile dealerships etc. The offences of money laundering are seriously takes effects as follows: Economic instability and distortion, loss of revenue, loss of control of economic policy, undermining the legitimate[9] private sectors, undermining the integrity of financial markets, increase of crime and corruption, transfers economic power from the market, government and citizens to criminals. Due to the high integration of capital markets, money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial systems. Furthermore, the sheer magnitude of the economic power that accrues to criminals from money laundering has corrupted effects on all elements of society. In extreme cases, it can lead to the virtual take-over of legitimate government. Money laundering is thus not only a law enforcement problem, it posses a serious national and international security threat as well. There is an Act namely The Money Laundering Prevention Act, 2012 and accordingly the duty to prevent money laundering is rest upon the Anti Corruption Commission (ACC). But the law is not sufficient alone to prevent money laundering without strict application of the law. So, it is high time to take steps to prevent money laundering from Bangladesh. Thus following initiatives may be taken to prevent money laundering- Enforcement of the laws strictly, increasing the power of Anti Corruption Commission as per its necessity, Campaigning regarding the negative aspects of money laundering and creating separate cell to prevent money laundering.
CONCLUSION[10]
Various government and non-government agencies at global, regional, and national levels have come up with a specific set of regulatory guidelines and mandates for the financial services industry to control money laundering. The emergence of technology and new payment methods in the financial industry has further opened new gateways to money launderers and so increased the focus of regulators on the industry. Financial institutions are challenged to deal with rising compliance requirements as well as to protect themselves from the legal, regulatory, and reputational risks of being associated with laundering activities. The rising volumes of customer transactions and the increased automated interaction with customers have made compliance more complicated for these firms. Moreover, anti-money laundering is one of the largest areas of regulatory compliance spending after operational risk management, highlighting the importance of dealing with anti-money laundering issues at an organization level. Firms can leverage technology by installing the best solutions available in the market according to their specific needs in order to automate most of their customary reporting activities.
[1] https://www.academia.edu/41404825/Money_laundering_Act_in_Bangladesh
[2] https://en.banglapedia.org/index.php?title=Prevention_of_Money_Laundering_Act,_2009
[3] https://www.slideshare.net/ZakariaMohammad/money-laundereing
Section-2 to 6 of the Money Laundering Prevention Act 2012.
[4] Section-7 to 12 of the Money Laundering Prevention Act 2012.
Section-13 to 15 of the Money Laundering Prevention Act 2012.
[5]Section-18 to 21 of the Money Laundering Prevention Act 2012.
http://bankersacademy.com/resources/free-tutorials/57-ba-free-tutorials/654-aml-bangladesh
[6] Section 22 & 23 of the Money Laundering Prevention Act 2012.
[7] https://www.slideshare.net/ZakariaMohammad/money-laundereing
[8] https://www.google.com/imgres?imgurl=https%3A%2F%2Fslideplayer.com%2Fslide%2F4704754%2F15%2Fimages%2F23%2FBangladesh%2Bfights%2Bagainst%2Bthe%2Bmoney%2Blaundering.jpg&imgrefurl=https%3A%2F%2Fslideplayer.com%2Fslide%2F4704754%2F&tbnid=kQLPENZRJy6ubM&vet=1&docid=RKb7Lfe-0UqYfM&w=960&h=720&itg=1&hl=en-US&source=sh%2Fx%2Fim
