The Ultimate Guide to AML & CFT Laws in Bangladesh
Your definitive 2025 resource for understanding the Money Laundering Prevention Act 2012, the role of the BFIU, and compliance obligations in Bangladesh.
Key Highlights of Bangladesh's AML/CFT Regime
Core Legislation
MLPA 2012 & ATA 2009 form the legal backbone.
28 Predicate Offences
A wide range of crimes that can trigger a money laundering charge.
Lead Agency: BFIU
The Bangladesh Financial Intelligence Unit leads enforcement.
Up to 20 Years
Severe imprisonment penalties for terrorist financing convictions.
1. The Legal Framework for AML/CFT in Bangladesh
Bangladesh's fight against financial crime is anchored by a comprehensive legal and regulatory framework. These laws collectively criminalize money laundering and terrorist financing, establish powerful enforcement bodies, and impose strict compliance duties on a wide range of businesses.
Money Laundering Prevention Act, 2012 (MLPA)
The cornerstone of AML legislation. It defines the offence, outlines penalties, and establishes the BFIU.
Money Laundering Prevention Rules, 2019 (MLPR)
Operationalizes the MLPA with detailed procedures for investigation, reporting, and compliance.
Anti-Terrorism Act, 2009 (ATA)
Targets terrorism and its financial roots, defining CFT crimes and prescribing harsh penalties.
Scope and Jurisdiction
The laws apply to all individuals and entities. They have extra-territorial reach, covering offences committed abroad with a nexus to Bangladesh.
Investigation and Trial Process
Per MLPA Section 9, AML offences are investigated by the Anti-Corruption Commission (ACC) and other designated agencies. Trials are held by Special Judges.
2. Key Definitions: What Constitutes an Offence?
The legislation provides specific, detailed definitions for the primary offences. Understanding these is critical for compliance and enforcement.
Defining Money Laundering
Knowingly moving, converting, or transferring property to: (i) conceal its illicit nature, source, or ownership; or (ii) help someone evade legal consequences of a predicate offence. [MLPA Sec 2(v)(a)]
Smuggling money/property abroad or transferring proceeds of crime internationally to hide its illegal source. [MLPA Sec 2(v)(b) & 2(v)(c)]
Conducting financial transactions in a way designed to avoid reporting requirements under the MLPA. [MLPA Sec 2(v)(d)]
Participating in, conspiring, attempting, abetting, or counseling to commit any of the above offences. [MLPA Sec 2(v)(h)]
Defining Terrorist Financing
Providing or Collecting Funds
Knowingly providing, receiving or collecting money, services, or property with the intent that it be used to carry out a terrorist act.
Supporting Terrorist Entities
Providing financial services to a person or entity known to be involved in terrorism, or to a proscribed (banned) organization.
3. Predicate Offences: The Criminal Origin
A "predicate offence" is the foundational crime that generates illegal money. Prosecutors must prove funds came from one of the specific crimes listed in Section 2(cc) of the MLPA. This link is fundamental to any AML case.
- Corruption and bribery
- Counterfeiting currency
- Extortion & Fraud
- Illegal trade of firearms
- Illegal drug trade
- Kidnapping & illegal restraint
- Murder, grievous physical injury
- Human, women & child trafficking
- Tax related offences
- Insider trading
- Theft, robbery, piracy
- Dowry
- Customs & excise offences
- Infringement of IP rights
- Terrorism & terrorist financing
- Environmental offences
- Sexual exploitation
- Organized crime
- Racketeering
- Forgery & counterfeiting deeds
- Illegal trade in stolen goods
- Black marketing
- Smuggling of currency
- Adulteration
- ...and any other offence the government notifies.
4. Penalties for Money Laundering in Bangladesh
Consequences for AML/CFT violations are severe, including long prison sentences, massive fines, and business sanctions. The MLPA also criminalizes actions that obstruct justice.
Maximum Imprisonment for Individuals
Money Laundering (MLPA, Section 4)
- Individuals: Imprisonment for 4 to 12 years and a fine up to twice the property value or BDT 1 million.
- Entities: A fine up to twice the property value or BDT 2 million. License can be cancelled.
Terrorist Financing (ATA, Section 7)
- Individuals: Imprisonment for 4 to 20 years and a fine up to twice the property value or BDT 1 million.
- Entities: A fine up to three times the property value or BDT 5 million. License can be cancelled.
Punishments for Other AML-Related Offences
Violation of Freeze Order (Sec. 5)
Punishment: Up to 3 years imprisonment, or a fine equal to the property's value, or both.
Divulging Information / Tipping Off (Sec. 6)
Punishment: Up to 2 years imprisonment, or a fine up to BDT 50,000, or both.
Obstruction of Investigation (Sec. 7)
Punishment: Up to 1 year imprisonment, or a fine up to BDT 25,000, or both.
Providing False Information (Sec. 8)
Punishment: Up to 3 years imprisonment, or a fine up to BDT 50,000, or both.
5. AML Compliance for Reporting Organisations
The MLPA designates a broad category of businesses as "Reporting Organisations." These entities are the first line of defense and have strict, legally mandated duties.
Who is a "Reporting Organisation"?
- Banks & Financial Institutions
- Insurers
- Money Changers & Remitters
- Stock Brokers & Asset Managers
- Real Estate Developers
- Dealers in Precious Metals/Stones
- Lawyers & Accountants
- Trust & Company Service Providers
- Non-Profit Organisations (NPOs)
- Non-Government Org. (NGOs)
- Cooperative Societies
Core Compliance Duties
- ✓ Customer Due Diligence (CDD): Identify and verify all customers. Anonymous accounts are prohibited. [MLPR Rule 7]
- ✓ Record Keeping: Retain records for at least five years after a relationship ends. [MLPR Rule 13]
- ✓ Suspicious Transaction Reporting (STR): Immediately file an STR with the BFIU for any doubtful transaction. [MLPR Rule 18]
- ✓ Risk-Based Approach (RBA): Assess and document business risks to apply appropriate mitigation measures. [MLPR Rule 10]
Penalties for Non-Compliance
Under MLPA (Sec. 25(2))
- Fine from BDT 50,000 to BDT 2,500,000.
- Cancellation of license or authorization to conduct business.
6. Investigation & International Cooperation
The MLPR 2019 designates specific agencies to investigate money laundering based on the associated predicate crime and formalizes international cooperation.
Designated Investigation Agencies (MLPR 2019, Schedule 1)
Bangladesh Police, Criminal Investigation Department (CID)
Investigates ML linked to most predicate offences, including fraud, forgery, trafficking, and terrorism financing.
Request for Information from Foreign FIU (MLPR 2019, Form 5)
Category | Information Required |
---|---|
1. Subject Details (Person or Entity) | |
Personal / Entity Info | Full Name, Aliases, Address, Phone, DOB, Nationality, ID/Passport Numbers, Professional Activity, Bank Accounts, Beneficial Owner Details. |
2. Case & Information Details | |
Case Description | Describe the case and principal violations. State the link to the country of the requested FIU. |
3. Investigation Status | |
Proceedings & Assets | State if there are ongoing proceedings and if asset forfeiture is anticipated. |
7. Enforcement Authority: The BFIU
The Bangladesh Financial Intelligence Unit (BFIU) is the central agency for combating money laundering. Established under the MLPA 2012, it operates as an independent unit within Bangladesh Bank, acting as the nerve center for financial intelligence.
BFIU Contact Information
Parent Body: Bangladesh Bank
Address: Head Office, Motijheel C/A, Dhaka, Bangladesh
Website: www.bb.org.bd/bfiu/
Core Powers & Functions
- Receive and analyze STRs.
- Issue orders to freeze suspicious accounts.
- Impose fines for non-compliance.
- Disseminate intelligence to investigation agencies.
- Formulate national AML/CFT policies.
Frequently Asked Questions (FAQs)
The primary legislation is the Money Laundering Prevention Act, 2012 (MLPA), supported by the Money Laundering Prevention Rules, 2019 (MLPR).
If you are a designated "Reporting Organisation," you must file a Suspicious Transaction Report (STR) directly with the Bangladesh Financial Intelligence Unit (BFIU).
Yes. MLPA Section 4(5) states that a conviction for the predicate offence is not required to be charged or punished for money laundering. However, the origin of the funds from a predicate offence must still be proven.