ARS = Alternative Remittance System;
BFIU = Bangladesh Financial Intelligence Unit;
CAMLCO = Chief Anti-Money Laundering Compliance Ofﬁcer;
CDD = Customer Due Diligence;
CFT = Combating Financing of Terrorism;
CTR = Cash Transaction Report;
FATF = Financial Action Task Force;
IMF = International Monetary Fund;
KYC = Know Your Customer;
MER = Mutual Evaluation Report; and
STR = Suspicious Transaction Report.
Money laundering is the process by which “dirty”money is “cleaned”. This “laundry”is
usually achievedby a three-step process,which incorporates the following:
(1) Placement: this is the initial entry of the dirty money into the ﬁnancial system.
This is the stage at which money launderers are most vulnerable, as moving large
sums of cash can catch the eyes of ofﬁcials.
(2) Layering: this often involves sophisticated international transfer of funds, and the
purchase of investment products. The funds are constantly moved to disguise
where they have been derived from and to avoid detection.
(3) Integration: this is when the funds are returned to the launderer through an
authentic ﬁnancial institute. By this stage, the money has been thoroughly cleaned.
This is a simpliﬁed overviewof what can sometimes be a very lengthy and complex process.
There is scope for variation and overlapat each of these stages. The purpose of this study is
to examine the global measurestaken by authorities to minimise money laundering through
implementing aneffective anti-money laundering (AML) framework.
Over the past century, signiﬁcantefforts have been made to tackle money laundering.To
this extent, intergovernmental organisations, like the Financial Action Task Force (FATF)
have been set up. There is a global AML framework which countries are expected to
implement domestically. However, some countries have not been able to enforce the
regulations as well as others. Itis evident that developed countriesare far better equipped in
dealing with money laundering than developing countries, which have fewer resources
available to them to tackle this growing phenomenon. This is further compounded by high
levels of corruption in a number of developing countries. Also, sometimes the lack of
political will to reign in wholesale abuse of AML regulations causes far greater damage to
the economy than some countries are willing to acknowledge or accept. One particular
example is Bangladesh. Thiscountry will be the focus of the present discourse.
The responsibility to regulate and superviseAML initiatives in Bangladesh lies with the
Bangladesh Bank. The primary organisation to deal with money laundering in Bangladesh
was the Financial Intelligence Unit (FIU), which was set up in June 2002 as part of
Bangladesh Bank, and was named the AML Department. On 25 January 2012, the FIU was
transformed into the BangladeshFinancial Intelligence Unit (BFIU) by provisionscontained
within the Money Laundering Prevention Act 2012 (Rahman, 2012). The BFIU operates
independently, yet still within the remit of Bangladesh Bank which is the central bank of