FATF asks govt to revise its action plan on money laundering

Express (August 25, 2011)

The Financial Action Task Force (FATF) on money laundering has asked the government to revise its action plan on combating money laundering.

The government earlier submitted a plan to the Task Force and Asia Pacific Group (APG) on money laundering.

President of FATF, Giancarlo Del Bufalo, in a recent letter to Finance Minister AMA Muhith underlined the need for bringing about the reforms latest by October, this year.

The letter outlined six specific actions for the government.

The actions relate to the need for identifying money laundering and terrorist financing as serious criminal activities, establishing and implementing adequate procedures to identify and freeze terrorist assets, implementing adequate procedures for the confiscation of funds related to money laundering, ensuring a fully operational and effectively functioning Financial Intelligence Unit, improving suspicious transaction reporting requirements and improving international cooperation.

The Financial Action Task Force (FATF) is an inter-governmental body working for the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. The Task Force is, therefore, a "policy-making body" which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

The government in June, 2010 submitted an Action Plan to FATF outlining its desire to tighten the money laundering and terrorist financing.

The Ministry of Finance (MoF) has, accordingly, initiated move to amend the current anti-money laundering Act and formulate regulations to plug the holes used for terrorist financing, a high official in the ministry said.

Meanwhile, the APG has recently sought clarification from the government on the rationale of offering money whitening facilities in the just concluded budget for 2011-2012. The APG believes the opportunity offered by the budget clearly demeans its effort in anti-money laundering move manifested in its action plan.

The FATF in a report in March, 2010 said Bangladesh has not yet attained the international standard in containing money laundering and terrorist financing activities.

The Action Plan of the government vowed to introduce online reporting system to make the Financial Intelligence Unit of BB more effective, undertake efforts to obtain the membership of Egmont Group and strengthen monitoring in the NGO Affairs Bureau, Securities and Exchange Commission and Post Office Department to combat money laundering and terrorist financing.

In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989. Recognising the threat posed to the banking system and to financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member states, the European Commission and eight other countries.

Officials in the MoF said they will soon convene meeting of Coordination Council on Money Laundering to review the entire situation based on the latest position of FATF and APG.

They said a Statutory Regulatory Order (SRO) will soon be issued by the revenue board on investing black money in bond and capital market. The SRO will clarify that other than income tax department other organisations of the government like Bangladesh Bank or Anti-corruption Commission could ask questions on source of money invested in two areas.