Reviewing the Money Laundering Prevention Act, 2012
The offence of money laundering in Bangladesh has amplified drastically over the years due to a lack of regulatory mechanisms, legal complications, and organisational dysfunction. However, our legislative framework has several legal tools designed to regulate and minimise the threat of money laundering. The Money Laundering Prevention Act of 2012 is the most notable addition. The Act aims to combat money laundering and prohibit criminals from disguising illegally obtained money as lawful income.
The definition of money laundering is found in section 2(v) of the Act, which contains two main elements: purpose and a detailed explanation of the commission of this crime. This Act defines any attempt as "money laundering" when someone tries to do financial transactions in a way that avoids the Act's reporting requirements.
Section 4(2) states that money laundering is punishable by imprisonment for a term of four to twelve years and a fine equal to twice the value of the asset, or BDT two million. In addition to this, section 4(3) allows the court to order the forfeiture of any assets associated with money laundering in favour of the state. However, sometimes the amount of the imposed fine is relatively low compared to the laundered money's current value when the judgment is given after a long time. Hence, applying fines equal to the total property's current value gained by using the laundered money may be a good solution.
Section 6 of the Act specifies punishment against the leakage of any information relating to the investigation with ill-intent, which can be up to two years imprisonment and/or a fine up to BDT fifty thousand, or both. Section 8 addresses the penalties for deliberately supplying false information about the sources, which is a maximum of three years imprisonment and/or a fine of up to BDT fifty thousand.
As per Section 12 of the Act, no court may take cognizance of any offence without the Bangladesh Financial Intelligence Unit's (BFIU) approval. This section affects the court's ability to handle money laundering offences. The sub-section of the said section is also debated, as it states that any investigation report about a violation of this Act must be presented to the BFIU for prior approval. This gives the BFIU very broad authority.
Section 14 deals with the freezing of laundered assets. As said, this Act has granted enormous authority to the investigative agency; if a formal request is made to the court, the court may order the freezing of any property associated with a money laundering charge. However, there is scope for misuse of this provision by the investigative agency.
As per section 24, the BFIU is established to exercise the power vested under section 23. The government has granted the BFIU operational independence, so that it may independently investigate financial offences. However, it is indeed true that the BFIU's exclusive power poses a threat to fairness due to the possibility of misuse by its own personnel.
Section 23 grants the BFIU the authority and obligation to prevent money laundering. Under section 23(1)(c), if the BFIU considers that a transaction involves money laundering, it can issue an order to stop or freeze the transaction. Section 23(4) says that if any organisation gives false information, the BFIU can fine the organisation up to a maximum of BDT five lakh. This vast power given to the BFIU can hinder the process of getting actual justice. It has created a dependence on the BFIU, which bars the natural justice process. Sometimes many honest officers may fall into trap, whereby the actual criminals are not brought to justice. Therefore, this section needs to be reviewed.
To sum up, we can say that the Money Laundering Prevention Act, 2012 was necessitated in view of the scenario in Bangladesh; however, it is not exhaustive. The BFIU's jurisdictional overlap poses a threat of abuse of power. Furthermore, the Act has a substantial number of legal loopholes caused by the misuse of legal provisions. Therefore, the Act should re-address the provisions that do not provide appropriate, precise, and reliable direction. It is time for our legislators to modify the Act and develop an efficient anti-money laundering law that focuses mainly on implementation to reduce money laundering to the bare minimum.
The Writers are Law Graduates from Bangladesh University of Professionals (BUP).