Money Laundering Prevention Act 2012

The Money Laundering Prevention Act 2012 (Act No. V of 2012) is Bangladesh's principal legislation against money laundering. It replaced the earlier Money Laundering Prevention Act 2009 and strengthened the legal framework to align with international standards set by the Financial Action Task Force (FATF). The Act criminalises the laundering of proceeds from a defined list of predicate offences and imposes obligations on financial institutions, non-profit organisations, and designated non-financial businesses and professions.

Money laundering is defined as the process of converting, transferring, or disguising the proceeds of a predicate offence to conceal its illicit origin. Under the Act, any person who knowingly assists in laundering proceeds faces imprisonment of 4 to 12 years and a fine equal to the amount laundered or up to Tk 10 lakh, whichever is higher. The Act also provides for the freezing, seizure, and confiscation of property derived from laundered funds.

Enforcement is shared between the Bangladesh Financial Intelligence Unit (BFIU) under Bangladesh Bank, the Anti-Corruption Commission (ACC), and the Criminal Investigation Department (CID) of Bangladesh Police. The BFIU serves as the national financial intelligence unit, receiving and analysing suspicious transaction reports from reporting entities.

Bangladesh Financial Intelligence Unit (BFIU): The BFIU operates under Bangladesh Bank as the national financial intelligence unit. It receives, analyses, and disseminates financial intelligence derived from suspicious transaction reports (STRs) and cash transaction reports (CTRs) submitted by reporting entities. The BFIU is Bangladesh's link to the international AML/CFT network, exchanging intelligence with foreign financial intelligence units through the Egmont Group.

Reporting entities: Banks, insurance companies, non-bank financial institutions, money changers, mobile financial service providers (bKash, Nagad, Rocket), securities dealers, real estate agents, jewellers, lawyers, accountants, and non-profit organisations are all designated reporting entities under the Act. They must file STRs within specified timeframes whenever they identify transactions that are suspicious, unusual, or inconsistent with a customer's known profile.

Cash Transaction Reports: All cash transactions exceeding Tk 10 lakh in a single day must be reported to the BFIU through a cash transaction report. This threshold applies to both deposits and withdrawals. Multiple transactions structured to avoid the reporting threshold (known as “smurfing” or “structuring”) are themselves reportable suspicious activities.

FATF and APG: Bangladesh is a member of the Asia/Pacific Group on Money Laundering (APG), the FATF-style regional body for the Asia-Pacific region. The APG conducts mutual evaluations of member countries against the FATF 40 Recommendations. Bangladesh underwent its most recent mutual evaluation in 2016, which identified several areas for improvement including beneficial ownership transparency, non-profit sector regulation, and enforcement effectiveness. An updated evaluation is expected in 2026–2027.

Grey list considerations: Bangladesh has not been placed on the FATF grey list (countries under increased monitoring), but the risk remains if identified deficiencies are not addressed. Key areas of concern include the volume of informal remittance channels (hundi/hawala), limited prosecution of standalone money laundering cases (as opposed to predicate offences), and gaps in the supervision of designated non-financial businesses and professions.