AML/CFT Compliance Requirements For

Financial Institutions & Checking of

Compliance Level.

Bangladesh Financial Intelligence Unit

Bangladesh Bank
Area of Discussion:
1. Compliance Requirements for FIs
Circulars/Circular Letters.
Guidelines/Policy.
Self Assessment Procedures.
Independent Testing Procedures
2. Checking of Compliance Level by
BFIU
Master circular on the Instructions to be followed by the financial institutions
for the prevention of Money Laundering and Terrorist Financing

BFIU Circular No-12

Issued on 29/06/2015

Consisting of 13 Sections and 5 Appendixes

Master circular on the Instructions to be followed by the financial
institutions for
the prevention of Money Laundering and Terrorist Financing
BFIU Circular No-12 Date : 29/06/2015
13 Sections at a glance
1. Compliance structure
2. Customer Accetance Policies
3. Customer identification
4. Adoption of Risk Based Approach
5. Responsibilities in case of adopting new products or technologies
6. Cash Transaction Report (CTR)
7. Suspicious Transaction Report (STR)
8. Self Assessment and Independent Testing Procedure
9. Prevention of Financing of Terrorism and Financing of Proliferation of Weapons of
Mass Destruction
10. Recruitment and training
11. Preservation of records and necessary information/documents
12. List of enforceable previously issued circulars/circular letters
13. All other circulars/circular letters issued by AMLD/BFIU substituted by this master
circular except section 12
Master circular to be followed by the financial institutions for
the prevention of Money Laundering and Terrorist Financing
BFIU Circular No-12 Date : 29/06/2015

Five Appendix
• Information on Chief Anti Money Laundering Compliance Officer(CAMLCO)
A and Deputy Chief Anti Money Laundering Compliance Officer(DCAMLCO)

• Account Opening Form

B

• Suspicious Transaction Reporting FORM (and goAML reporting)

C

• Questions for Determining Own Position by the Branch using Self-Assessment

D Procedure

• Checklist for Branch Inspection under ITP

E
-FIs shall identify and assess the ML/TF risks that may arise in relation to the
development of technology based new products and new business practices
(such as, transaction through internet, Electronic Cards etc), including new
delivery mechanisms, and the use of new or developing technologies for both
new and pre-existing products; and take appropriate measures to manage the
emerged risks from these products or practices
- Cash transaction means cash transaction conducted by their customers or third parties in the
bank account maintained on their behalf by FI. Cash deposit/withdrawal) of 10 (ten) lac taka
or more in one or more transactions.
- CTR shall have to be reported on monthly basis. CTR report of every month shall have to be
submitted to BFIU by 21st of next month through goAML web
- CTR and STR are separate system. Verify CTR to identify suspicious transaction. If no such
transaction is identified, it shall have to be certified by CAMLCO that ‘No suspicious
transaction has been found’ while reporting the CTR to BFIU through Message Board of
goAML web.
- If there is no reportable cash transaction in a particular month, BFIU should be informed by a
certificate as ‘No cash transaction report has been found’ thorough the message board of
goAML web.
- In case of accounts of govt. semi govt. and autonomous organizations only Cash withdrawal
will be reported.
- On monthly basis, cash transaction report of each branch shall have to be preserved in that
respective branch.
- Preserve the information related to CTR up to 5 (five) years from the month of submission to
BFIU.
 All the official of every Financial Institution shall remain conscious and alert to identify
suspicious transactions in everyday transactions and activities.
 While identifying suspicious transactions, officials of FIs shall consider the definitions
described under article 2(z) of MLPA, 2012 and article 2(16) of ATA, 2009
 If any suspicious transaction is identified by any officer of a branch, it has to be
informed to the BAMLCO immediately in black and white.
 If the transaction or activity seems to be suspicious, it, along with all necessary
supportive documents, has to be sent to the CCU without any delay.
 Report through goAML
 The Financial Institutions shall preserve information related to STR until further
instruction from BFIU
 With the detection of suspicious transaction concerned official shall ensure its
secrecy and shall not behave in a manner that may make the concerned customer
become aware of it.
 Even if transactions or activities are not detected as suspicious at branch level, if an
activity or transaction is deemed as suspicious by the CCU it shall report it to BFIU
- To detect and prevent TP and PF establish an effective mechanism approved by the board;
issue instructions about the duties of FI officials, review those instruction from time to time
and ensure that they are complying with the instructions issued by BFIU.
- Electronically preserve the UNSCRs List and Domestic Sanction List
- Monitor regularly whether there are any loan/deposit account or any transactions in the name
of the UNSCRs List and Domestic Sanction List. If found any account FI shall stop payment
or transaction immediately and communicate to BFIU with detailed information of that
account at the following day.
- Whether there are any account (deposit/loan account) of individual or entity, under the
resolution 1373(2001) of United Nation Security Council, by the request of foreign
government or foreign FIU or listed or banned by Bangladesh government under that
resolution has to be monitored by all financial institutions and if necessary all transaction has
to be reviewed. Immediately after the identification of any account (deposit/loan account) of
any listed individual or entity concerned FI shall stop that transaction/account and intimate to
BFIU the detailed information at the following working day.
10.1 Recruitment
- Financial Institution shall follow proper Screening Mechanism in their different
recruitment process that it does not face this type of risk by any level of officials.

10.2 Training- Officials of Financial Institutions

- FI shall arrange adequate training programs for all the and shall preserve
information and documents regarding training.

10.3 Education-Bank Customer

- apprise the customer of the rationale for various requested information and
document submission before account (deposit/loan) opening.
- distribute leaflet for increasing the awareness on ML, TF and PF and shall install
related poster on a visible place of every FI branch.
- take proper steps for broadcasting awareness building advertisement and
documentaries on prevention of money laundering and terrorist financing throng
different mass media under Corporate Social Responsibility.
 All necessary information/documents on customer's deposit/loan
accounts and transaction must be preserved for at least 5(five) years
after closing the account/business relationship.

 All information and documents collected during CDD procedure along

with KYC, account related documents, business correspondence and
any report prepared on a customer has to be preserved for at least
5(five) years after closing the account/deposit/loan.

 Preserved information has to be sufficient for presenting as a

documentary proof for the judiciary process of the offence.

 FIs shall provide all information and documents collected during CDD
along with KYC procedure and information and documents of
transactions as and when BFIU demands or instructs.
Circular/circular letter no Date of issuance Subject

AML circular no.-22 April 21, 2009 About issuance of Anti Terrorism Act, 2009

BFIU circular letter no.-01 January 30, 2012 About naming BFIU.

BFIU circular no.-02 March 15, 2012 About issuance of Money Laundering Prevention
Act, 2012 and Anti Terrorism Act (Amendment),
2012

BFIU circular No-04 September 16, 2012 Regarding issuance of Guidance Notes on
Prevention of Money Laundering and Terrorist
Financing for financial institutions.

BFIU circular no.-07 July 14, 2013 About issuance of Anti Terrorism Act(Amendment),
2013

BFIU circular letter no.-03/2015 April 09, 2015 On issuance Money Laundering Prevention Rules,
2013 & Anti Terrorism Rules, 2013
Self Assessment Independent
Testing Procedures
 Self Assessment



Independent Testing Procedure
 Self Assessment Independent Testing
Procedures


 UN Sanction List

KYC Profile
STR

PEPs
 Independent Testing Procedures

KYC
TP
STR
CCU

AML
Checking of AML/CFT Compliance
Level of Financial Institutions by BFIU.
Supervision & Monitoring By BFIU
 Presentation Focused on:
On-site monitoring by BFIU.

(New Check list for Compliance

Inspection)

Off-Site scenarios.

(Reporting summary & Special Meeting)

Practical cases
ON-SITE MONITORING OF
FINANCIAL INSTITUTIONS
 System Check Inspection
Areas of concern and weights
(Head Office) (Branch)
Evaluation of
Evaluation of Higher BAMLCO
Authority's dedication
Self-assessment

Central Compliance Unit

(CCU) Stuff/Officer Awarness
7% on AML/CFT
9% 15% 7%
26% 4% 11%
7% Training & Customer KYC
6%
Awareness 5%
9%
17%
27% Transaction Monitoring
14% 28% Return 8%

CTR & STR

RecordKeeping
Return

Compliance of Previous
Record Keeping
Inspection

Audit, Inspection &

Overall Management on
Overall Management
AML/CFT
 System Check Inspection
Major Changes in the Areas of concern and
Sl Areas of concern Weights weights
Current Comments
before Weights
1 KYC 23 27 Increased by 4 points
2 Self -Assessment 7 11 Increased by 4 points

3 CTR & STR 15 17 CTR was not regulatory obligation for

FIs before
4 Audit, Inspection & 8 15 More attention will be paid on the
Overall compliance status of previous Audit &
Management Inspection conducted by Regulators as
well as organization itself
5 Evaluation of 10 26 Earlier it was evaluated under the
Higher Authority's section titled “AML/CFT Policy and
dedication Procedure Formulation”
6 CCU + Training & 20 + 8 28 + 14 Besides Staff Training, Customer
Customer Awareness program has been included
Awareness
 System Check Rating

Rating Point Remarks

1 90+ to 100 Strong

2 70+ to 90 Satisfactory

3 55+ to 70 Fair

4 40+ to 55 Marginal

5 40 and Below Unsatisfactory

System Check Inspection conducted on FIs by BFIU
Total FIs Head Office Branch

31 31 31 31 32 33

19
16

13
12
9
8 8
0
4
2 4 5
30.06.2013
31.12.2013
31.12.2014
30.06.2015
31.12.2015
30.06.2016
 System Check Inspection Rating Status of FIs

2015 2016

5% 7%
40%
40% 55%
53%

Fair Fair
Marginal Marginal
Unsatifactory Unsatifactory
 Changes of System Check Rating

2015 2016 Change Comments

Fair 55% 40%

No FI was
found to be
Marginal 40% 53% rated as
“Satisfactory
” of “Strong”
Unsatisfactory 5% 7%
 observations in the System Check
 Policy/Guidelines do not reviewed/updated based on new laws
and regulations.
 CCU does not submit evaluation report on Self-Assessment &
Independent Testing Procedure before the top management.
 MD/CEOs message on AML/CFT issues are not communicated
to all employees regular basis.
 CCU does not Monitor Branch level activities regarding
AML/CFT issues through on-site and off-site.
 Officials are not sufficiently aware of MLPA/ATA and
Regulatory Instructions & Guidelines.
 Most of the Officials or even CAMLCOs, D’CAMLCOs and
BAMLCOs not yet received comprehensive training on
AML/CFT issues but conducting in-house program.
 Special Inspection (Non Submission of
STRs)
• Branch officials including BAMLCO are not updated regarding
AML/CFT issues.
 Beneficial Owner is not identified while making KYC.
 Relay on banks or other parties while making KYC to ensure source of
fund.
 Information/Documents regarding source of fund/client’s profession are
not obtained or confirmed. Besides, Clients’ identity are not verified.
 Actual scenarios are not reflected in Self-Assessment report.
 Do not analyze CTR statement to detect STR elements.
 ITP is not done by the Internal Audit team while conducting branch Audit
as instructed.
 Do not monitor accounts in a risk sensitive basis by categorization its
risks.
 Lake of awareness (Meeting, Training etc.)
 Non-compliance Issues by FIs
 CAMLCOs are not designated in line with the
regulatory instruction.
 Latest regulatory instructions are not followed in
case of reporting CTR, STR and other reporting.
 Actual scenarios are not reflected in Self-
Assessment report.
 Required number of periodical statement are not
submitted accordingly.
 ITP is not done by the Internal Audit team while
conducting branch Audit as instructed.
 Non-compliance Issues
Sl Noncompliance Issues No. of Comments
. Companies

1. Not Submitting STR 26

2. Not Submitting CTR 13

2. Not Conducted ITP 18

4. Not Submitted latest Self- 13

Assessment
5. CAMLCO’s position 7 7 FIs not submit
bellow 3rd Rank report yet
 CTRs & STRs Submitted by FIs
Report No. of No. of
Year Type STR Institutions Tr. Volume

2016 STR 46 7 -

2015 STR 30 7 -

2016 CTR - 20 202,76,43,511

2015 CTR - 18 162,96,28,870

Employee received AML/CFT training as well as
refreshers' training
 Special Meeting with Low rated Companies
 Latest Policy/Guidelines were not approved by the board or
higher authority.
 MD/CEOs message on AML/CFT issues are not communicated
to all employees regular basis.
 CCU does not Monitor Branch level activities regarding
AML/CFT issues through on-site and off-site.
 BFIU Rating between 41 to 56
 Beneficial Owner is not identified while making KYC.
 Relay on banks or other parties while making KYC to ensure
source of fund.
 Information/Documents regarding source of fund/client’s
profession are not obtained or confirmed. Besides, Clients’
identity are not verified.
 Actual scenarios are not reflected in Self-Assessment report.
 Comparison of BFIU rating with that of
ITP
Company BFIU ITP Comments
Score Score
Company - 41 - 56 40 - 70 No FI was found
to be rated as
A “Satisfactory” of
“Strong” by
Company - 43 80 - 86 BFIU rather
there were few
“unsatisfactory”
B
. In case of ITP,
Company - 38 - 47.5 73 -74 it is not reflected
C
Real Cases
 Expectations from FIs
o Proper implementation of AML/CFT Policy and
Procedure.
o Submit required number of reports specially STRs
in a timely manner.
o Capacity building of FIs’ employees on regular
basis.
o Ensure implementation of UNSCR.
o Effective implementation of Risk Based Approach.
o AML/CFT system’s GAP review through
conducting on-site visit by CCU on it’s branches.
Address:
Sharmin Prodhan
Joint Director
Bangladesh Financial Intelligence Unit (BFIU)
11th Floor, 2nd Annex Building
Bangladesh Bank
Motijheel, Dhaka-1000.

FAX: +88 02 9530089

Cell: 01762181188
Email: sharmin.prodhan@bb.org.bd