Banks asked to assess terror financing risks in three months

The banks in Bangladesh were on Thursday issued guidelines to assess risks of money laundering and terrorist financing in their operations, and were given by three months to complete such assessment 31 March. The output of this assessment will be used as core risk assessment guideline, the central bank said in a press release on Thursday.
A press release issued by the Bangladesh Bank on the day said, “Bangladesh Financial Intelligence Unit (BFIU) issued a guideline through a circular letter on 8 January 2015 for all banks working in Bangladesh titled “Money Laundering and Terrorist Financing Risk Assessment Guidelines for Banking Sector” as per the provisions of Section 23 (1) (d) of Money Laundering Prevention Act (MLPA) 2012 and Section 15 (1) (d) of Anti Terrorism Act (ATA) 2009. “This guideline is issued to comply with the Rule 21 of Money Laundering Prevention Rules (MLPR) 2013 which states that every Reporting Organisation-Financial Institution (RO-FI) shall conduct periodic risk assessment and forward the same to the Bangladesh Financial Intelligence Unit (BFIU) for vetting and the Recommendation 1 of Financial Action Task Force (FATF) which requires financial institutions and designated non-financial businesses and professions (DNFBPs) to identify, assess and take effective action to mitigate their money laundering and terrorist financing risks.
“This guideline will provide the basic ideas of identifying, assessing and mitigating money laundering & terrorist financing risks that banks may encounter in doing their businesses. Generally, banks may face business risks arising from their customers, product & services, delivery methods/channels, jurisdictions or geographical presence and/or regulatory risks like non compliance with the requirements of MLPA 2012, ATA 2009 and directives issued by BFIU. Firstly, banks do need to identify those business risks and/or regulatory risks. In order to treat those identified risks banks shall assess the level of risks by blending likelihood and impact of the risks. Banks shall put AML&CFT program in place to conduct periodic risk assessment. However, this guideline shall be treated as minimum instructions and indications to identify and assess the risk of ML & TF in their businesses and take effective measures to mitigate the identified risk. Banks are allowed to use more stringent tools to identify and assess the risk of ML & TF in their entities.
“This risk assessment guideline will help banks to allocate their resources efficiently to comply with AML&CFT measures in Bangladesh. According to the instruction of risk mitigation banks have to apply enhanced due diligence in high risk scenario and simplified due diligence in case of low risk scenario.
“This guideline has been issued with a view to ensuring effective implementation of AML&CFT measures as well as reinforces the current pace of financial inclusion.
“According to the BFIU’s instructions banks will get three months (up to 31 March, 2015) to complete the risk assessment process. BFIU also instructed banks that output of this risk assessment will be utilized as input of AML&CFT core risk management guideline.”