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MANAGING CORE RISK IN BANKING

Money Laundering & Terrorist Financing

Risk Management Guidelines

28 September, 2016

Anti-Money Laundering Division

Export Import Bank of Bangladesh Limited

Table of Contents

Sl. Name Page No.

Chapter 01 : An Overview on Money Laundering, Terrorist Financing and International

Initiative and National Initiatives

1-11

1.1 Introduction 1-1

1.2 Defining Money Laundering 1-2

1.3 How Money Laundering is done? 2-2

1.4 Why Money Laundering is Done? 2-3

1.5 Predicate Offences 3-3

1.6 Offence of Money Laundering and Punishment 3-5

1.7 Defining Terrorist Financing 5-5

1.8 The Link between Money Laundering and Terrorist Financing 5-6

1.9 Targeted Financial Sanctions 6-6

1.10 Powers and Responsibilities of BFIU in Preventing Money Laundering 6-8

1.11 Responsibilities of Reporting Organizations in Preventing Money Laundering 8-9

1.12 Why we must Combat ML & TF? 9-10

1.13 International Initiatives towards AML/CFT 10-10

1.14 National Initiatives on ML & TF 10-11

Chapter 02 : Risk Based Approach (RBA) 12-22

2.1 What is the RBA? 12-12

2.2 What is Required for RBA? 12-12

2.3 Obligation for ML & TF Risk Assessment and Management 13-13

2.4 What is Risk? 13-13

2.5 What is Risk Management? 13-13

2.6 Which Risk do Banks Needs to Manage? 13-14

2.7 Risk Management Process 14-17

2.7.1 Risk Identification 14-16

2.7.2 Risk Assessment and Evaluation 16-17

2.7.3 Risk Treatment 17-17

2.7.4 Monitoring and Review 17-17

2.8 Risk Management Strategies 18-18

2.9 Ongoing Risk Monitoring 18-19

2.10 Higher Risk Scenario 19-20

2.11 Lower Risk Scenario 20-21

2.12 Risk Variables 21-21

2.13 Counter Measures for Risks 21-22

2.14 Ongoing Due Diligence 22-22

Chapter 03 : Objective, Scope and Compliance Structure of the Bank 23-36

3.1 Objectives 23-23

3.2 Scope 23-23

3.3 Applicability 23-23

3.4 Compliance Policy Statement 23-24

3.5 Roles and Responsibilities of Board of Directors 25-25

3.6 Roles and Responsibilities of Senior Management 25-27

3.7 Statement of Commitment of CEO & MD 27-27

Sl. Name Page No.

3.8 Organizational Structure for Implementation of AML & CFT Program 27-27

3.9 Formation of Central Compliance Unit (CCU) 28-28

3.10 Authorities & Responsibilities of CCU 28-30

3.11 Appointment & Qualification of CAMLCO 30-31

3.12 Authorities & Responsibilities of CAMLCO 31-32

3.13 Appointment & Qualification of D-CAMLCO 32-32

3.14 Authorities & Responsibilities of D-CAMLCO 32-32

3.15 Appointment & Qualification of BAMLCO 33-33

3.16 Authorities & Responsibilities of BAMLCO 33-34

3.17 Roles & Responsibilities of Account Opening Officer/Operation Manager/Relationship

Manager

34-34

3.18 Roles & Responsibilities of ICCD 34-36

3.19 External Auditor 36-36

Chapter 04 : Customer Acceptance Policy 37-47

4.1 Objectives 37-37

4.2 Who are Customers for AML & CFT? 37-37

4.3 Customer Acceptance Policy 37-47

4.3.1 General Requirements 37-39

4.3.2 Specific Requirements 39-47

4.3.2.1 Individual Account 39-39

4.3.2.2 Minor 39-40

4.3.2.3 Illiterate Person 40-40

4.3.2.4 Non Resident Bangladeshi & Foreign National 40-40

4.3.2.5 Married Woman or Housewife 41-41

4.3.2.6 Pardansheen Women 41-41

4.3.2.7 Blind Man/Woman 41-42

4.3.2.8 Joint Accounts 42-42

4.3.2.9 Politically Exposed Persons (PEPs) 42-42

4.3.2.10 Influential Persons (IPs) 43-43

4.3.2.11 Chief Executive of any International Organization or any top level official 43-43

4.3.2.12 Legal Persons/Organizations 43-44

4.3.2.13 Legal Arrangement such as NGO/Trust/Club/Charity/Social Association 44-44

4.3.2.14 Walk-in Customers 44-45

4.3.2.15 Non Face to Face Customers 45-45

4.3.2.16 Correspondent Banking 45-46

4.3.2.17 Money or Value Transfer Services (MVTS) 46-46

4.3.2.18 New Technologies 46-46

4.3.2.19 Wire Transfers 46-47

4.3.2.20 Designated Non-Financial Businesses and Professions (DNFBPs) 47-47

Chapter 05 : Customer Due Diligence 48-70

5.1 KYC Policy & Procedures 48-48

5.1.1 Standard KYC Information 48-48

5.2 What is Required for CDD? 48-49

5.3 When CDD is Required (Timing of CDD)? 49-49

5.4 Risk Grading and Applicable CDD 49-49

5.5 Ongoing CDD Measures ( Review & Update) 50-50

Sl. Name Page No.

5.6 Enhanced CDD Measures 50-50

5.7 CDD Measures & Beneficial Owners 51-51

5.8 Specific CDD Measures 51-70

5.8.1 Individual Customer 51-52

5.8.2 NRB (Non-Resident Bangladeshi) 52-53

5.8.3 Joint Customer 53-53

5.8.4 Sole Proprietorship Concern 53-54

5.8.5 Partnership Concern 54-55

5.8.6 Private Limited Companies 55-56

5.8.7 Public Limited Companies 56-57

5.8.8 Accounts of Societies, Associations, NGOs, Clubs, Trust and other similar

organizations

57-58

5.8.9 Verification of Fund 58-58

5.8.10 Exception When Opening a Bank Account (Opening Account without Verification) 58-59

5.8.11 In Case Where Conducting the CDD Measure is not Possible 59-59

5.8.12 Persons without Standard Identification Documents 59-60

5.8.13 Walk-in/One Off Customers 60-61

5.8.14 Non Face to Face Customers 61-61

5.8.15 Corresponding Banking 61-63

5.8.16 Politically Exposed Persons (PEPs) 63-64

5.8.17 Influential Persons (IPs) 64-65

5.8.18 Chief Executive of any International organization or any top level official 66-67

5.8.19 Close Family Members and Close Associates of PEPs, IPs and Chief Executives or

Top Level Officials of any International organization

67-68

5.8.20 Reliance on Third Party 68-69

5.8.21 Management of Legacy Accounts 69-69

5.8.22 High Risk Countries 69-70

Chapter 06 : Wire Transfers & Money or Value Transfer Services 71-77

6.1 Wire Transfers 71-71

6.1.1 Wire Transfer Related Definitions 71-71

6.2 General Requirements 72-72

6.3 Ordering Banks/Institutions (Banks/Institutions Conducting Outward Remittance) 72-74

6.4 Intermediary Banks/Institutions 74-75

6.5 Beneficiary Banks/Institutions (Banks/Institutions Conducting Inward Remittance) 75-76

6.6 Money or Value Transfer Services (MVTS) 76-77

6.6.1 Money or Value Transfer Services related Definitions 76-76

6.6.2 Key Features of MVTS 76-77

Chapter 07 : Trade Based Money Laundering 78-93

7.1 Recognition of Trade Based Money Laundering & Terrorist Financing 78-78

7.2 Trade Based Money Laundering Related Definitions 78-78

7.3 Trade Finance Tools & Their Vulnerabilities 79-82

7.3.1 Documentary Credit/ Letter of Credit (LC) 79-79

7.3.2 Open Account Facilities 79-80

7.3.3 Pre-Shipment Finance 80-80

7.3.4 Post-Shipment Finance 81-81

7.3.5 Buyer’s Credit 81-81

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7.3.6 Supplier’s Credit 81-82

7.3.7 Countertrade 82-82

7.4 General CDD Requirements 82-83

7.5 Specific CDD Measures for Import Business 83-89

7.5.1 KYC Policy & Procedures 83-84

7.5.2 Collection & Verification of Import Related Documents 84-85

7.5.3 Assessment & Evaluation of Import Documents 85-89

7.6 Specific CDD Measures for Export Business 89-93

7.6.1 KYC Policy & Procedures 89-89

7.6.2 Collection & Verification of Export Related Documents 89-90

7.6.3 Assessment & Evaluation of Export Documents 90-93

Chapter 08 : New Technologies: Islamic Investment Card, Debit Card, Pre-paid Card,

Mobile Banking, Internet Banking and Alterative Delivery Channels

94-112

8.1 New Technology Related Definitions 94-95

8.2 New Technology Related Products and Services & Their Vulnerabilities 95-102

8.2.1 EXIM Islamic Investment Card 95-96

8.2.2 EXIM Cash (Mobile Banking) 96-97

8.2.3 EXIM Debit Card 97-98

8.2.4 EXIM Pre-paid Card (EXIM Hajj/Travel Card/ Remittance Card/Gift Card) 98-99

8.2.5 Automated Teller Machine (ATM) 99-99

8.2.6 Cash Deposit Machine (CDM) 99-100

8.2.7 Point of Sale (POS) 100-101

8.2.8 AISER (Internet Banking) 101-101

8.2.9 SMS Banking 101-102

8.2.10 Call Center 102-102

8.3 General CDD Requirements 103-104

8.4 Specific CDD Measures for Products & Delivery Channels 104-112

8.4.1 EXIM Islamic Investment Card 104-105

8.4.2 EXIM Cash (Mobile Banking) 105-106

8.4.3 Debit Card 106-107

8.4.4 EXIM Hajj/Prepaid/Travel/Remittance/Gift Card 107-108

8.4.5 Automated Teller Machine (ATM) 108-109

8.4.6 Cash Deposit Machine (CDM) 109-109

8.4.7 Point of Sale (POS) 109-110

8.4.8 AISER (Internet Banking) 110-111

8.4.9 SMS Banking 111-111

8.4.10 Call Center 111-112

Chapter 09 : Terrorist Financing and Proliferation Financing 113-130

9.1 Legal Obligations 113-113

9.2 Obligations under Circular 113-113

9.3 What is Terrorist Financing? 113-114

9.4 Offences and Punishment relating to Financing for Terrorist Activities 114-115

9.5 Powers of Bangladesh Bank 115-116

9.6 Duties of Reporting Organizations 116-117

9.7 Necessity of Funds by Terrorist 117-117

9.8 Sources of Fund/Raising of Fund 117-117

Sl. Name Page No.

9.9 Movement of Terrorist Fund 117-118

9.9.1 Formal Financial Sector 117-117

9.9.2 Trade Sector 117-118

9.9.3 Cash Couriers 118-118

9.9.4 Use of Alternative Remittance Systems (ARS) 118-118

9.9.5 Use of Charities and Non-Profit Organizations 118-118

9.10 Targeted Financial Sanctions (TFS) 118-119

9.10.1 Meaning of Targeted Financial Sanctions (TFS) 118-119

9.10.2 TFS related to terrorism and terrorist financing 119-119

9.10.3 TFS related to Proliferation 119-119

9.10.4 Legal Obligation to Implement TFS in Bangladesh 119-119

9.10.5 Sources of Sanctions List to be Complied/Screened 119-119

9.11 Automated Screening Mechanism of UNSCRs & OFAC 120-126

9.11.1 Sanction Screening Process 120-121

9.11.2 Screening Process for New/Walk-in Customer 121-122

9.11.3 Sanction Screen Process for existing Customers 122-122

9.11.4 Screen Process of Entities 123-123

9.11.5 Remittance Screening Process 123-124

9.11.6 SWIFT Outgoing & Incoming Message Screening Process 124-124

9.11.7 Outgoing/Sending SWIFT Message 124-124

9.11.8 Incoming/Receiving SWIFT Message 124-125

9.11.9 Responsibilities for Head Office 125-125

9.11.10 Responsibilities for AD Branches 125-125

9.11.11 Refusing Process for True Positive Statement 126-126

9.12 Role of Branch/Subsidiary/Head Office Division in Preventing TF & PF 126-128

9.13 Role of CCU in Preventing TF & PF 128-130

Chapter 10 : Transaction Monitoring 131-140

10.1 Software Based Transaction Profile (TP) Setting & Transaction Monitoring Techniques 131-135

10.2 Software Based Transaction Monitoring in EXIM AML System 135-139

10.2.1 Transaction Summary Statistics 135-135

10.2.2 A/C Wise Online Transaction 136-136

10.2.3 Geographical Online Transaction 136-137

10.2.4 Transaction 360 Degree 137-137

10.2.5 Detail of Border Area transaction of each A/c’s 137-138

10.2.6 Transaction Pattern Analysis 138-139

10.3 Structuring Report Analysis 139-140

10.4 CTR Report Analysis 140-140

Chapter 11 : Recruitment, Awareness and Training 141-142

11.1 Recruitment 141-141

11.1.1 Pre-employment Screening 141-141

11.1.2 Post-employment Screening 141-141

11.2 Employee Training 141-142

11.2.1 Basic Trainings 141-141

11.2.2 Advanced Trainings 142-142

11.3 Awareness Building 142-142

11.3.1 Awareness of Senior Management 142-142

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11.3.2 Awareness of Customer 142-142

11.3.3 Awareness of Mass People 142-142

Chapter 12 : Reporting 143-151

12.1 Cash Transaction Reporting 143-144

12.2 Suspicious Transaction Reporting 144-149

12.3 Quarterly AML/CFT Meeting Minutes Report 149-149

12.4 Bi-Monthly Statement 2 & 3 (Information to Central Task Force) 149-149

12.5 Self-Assessment Reports & Independent Testing Procedures 149-151

12.5.1 Responsibilities of the Branch regarding Self Assessment Report 149-150

12.5.2 Responsibilities of ICCD regarding Independent Testing Procedures 150-150

12.5.3 Responsibilities of Central Compliance Unit’s (CCU) regarding Self Assessment

and Independent Testing Procedures

150-151

Chapter 13 : Record Keeping 152-156

13.1 Legal Obligations 152-152

13.1.1 Obligations under MLPA, 2012 152-152

13.1.2 Obligations under MLP Rules, 2013 152-152

13.1.3 Obligations under Circulars 152-152

13.2 Records to be Kept by the Branch 153-155

13.2.1 Customer Information 153-153

13.2.2 Transactions 153-153

13.2.3 Internal and External Suspicion Reports 153-153

13.2.4 Training & Compliance Monitoring 154-154

13.2.5 Required Files Format for AML/CFT Compliance 154-155

13.3 Records to be Kept by Subsidiary 156-156

13.4 Records to be Kept by Head Office Division 156-156

13.5 Records to be Kept by CCU 156-156

13.6 Record Keeping Formats and Retrieval of Records 156-156

Abbreviations 157-162

Annexure

Annexure-A Risk Register

Annexure-B KYC Documentation

Annexure-C Internal Suspicious Activity Report Form (ISAR)

Annexure-D KYC for Walk-in Customer/other than A/C holder

Annexure-E Anti-Money Laundering & Combating Financing of Terrorism

Questionnaire for Correspondent Relationship

Annexure-F STR Form

Annexure-G STR Form_Wire Transfer/Mobile Financial Service


1 | P a g e Money Laundering & Terrorist Financing Risk Management Guidelines

CHAPTER 01

An Overview on Money Laundering, Terrorist Financing and International

Initiative and National Initiatives

1.1 Introduction

Money Laundering is happened by launderers worldwide to conceal the proceeds earned from criminal

activities. It happens in almost every country in the world, and a single scheme typically involves

transferring money through several countries in order to obscure its origins. And the rise of global

financial markets makes money laundering easier than ever, making it possible to anonymously deposit

proceeds of crime in one country and then have it transferred to any other country for use.

Money laundering has a major impact on a country’s economy as a whole, impeding the social, economic,

political, and cultural development of a society. Both money laundering and terrorist financing can

weaken individual financial institution, and they are also threats to a country’s overall financial sector

reputation. Combating money laundering and terrorist financing is, therefore, a key element in

promoting a strong, sound and stable financial sector.

The process of money laundering and terrorist financing (ML/TF) is very dynamic and ever evolving. The

money launderers and terrorist financers are inventing more and more complicated and sophisticated

procedures and using new technology for money laundering and terrorist financing. To address these

emerging challenges, the global community has taken various initiatives against ML & TF. In accordance

with international initiatives, Bangladesh has also acted on many fronts.

1.2 Defining Money Laundering

Money laundering can be defined in a number of ways. But the fundamental concept of money

laundering is the process by which proceeds from a criminal activity is disguised to conceal their illicit

origins. Most countries adopted to the following definition which was delineated in the United Nations

Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) (the Vienna

Convention) and the United Nations Convention Against Transnational Organized Crime (2000) (the

Palermo Convention):

• The conversion or transfer of property, knowing that such property is derived from any offense,

e.g. drug trafficking, or offenses or from an act of participation in such offense or offenses, for

the purpose of concealing or disguising the illicit origin of the property or of assisting any person

who is involved in the commission of such an offense or offenses to evade the legal

consequences of his actions;

• The concealing or disguising the true nature, source, location, disposition, movement, rights with

respect to, or ownership of property, knowing that such property is derived from an offense or

offenses or from an act of participation in such an offense or offenses, and;

• The acquisition, possession or use of property, knowing at the time of receipt that such property

was derived from an offense or offenses or from an act of participation in such offense or

offenses.

The Financial Action Task Force (FATF), the international standard setter for anti-money laundering (AML)

and combating financing of terrorism (CFT) efforts, recommends that money laundering should

criminalized in line with the Vienna Convention and Palermo Convention. Like other countries of the

world, Bangladesh has criminalized money laundering in line with those conventions. Moreover,



Bangladesh also considers some domestic concerns like ‘smuggling of money or property from

Bangladesh’ in criminalizing money laundering.

Section 2 (v) of Money Laundering Prevention Act (MLPA), 2012 of Bangladesh defines money laundering

as follows:

‘Money laundering’ means –

i. knowingly moving, converting, or transferring proceeds of crime or property involved in an

offence for the following purposes:-

(1) concealing or disguising the illicit nature, source, location, ownership or control of the

proceeds of crime; or

(2) assisting any person involved in the commission of the predicate offence to evade the

legal consequences of such offence;

ii. smuggling money or property earned through legal or illegal means to a foreign country;

iii. knowingly transferring or remitting the proceeds of crime to a foreign country or remitting or

bringing them into Bangladesh from a foreign country with the intention of hiding or disguising

its illegal source; or

iv. concluding or attempting to conclude financial transactions in such a manner so as to reporting

requirement under this Act may be avoided;

v. converting or moving or transferring property with the intention to instigate or assist for

committing a predicate offence;

vi. acquiring, possessing or using any property, knowing that such property is the proceeds of a

predicate offence;

vii. performing such activities so as to the illegal source of the proceeds of crime may be concealed

or disguised;

viii. participating in, associating with, conspiring, attempting, abetting, instigating or counseling to

commit any offences mentioned above.

1.3 How Money Laundering is done?

Obviously there is no single way of laundering money or other property. It can range from the simple

method of using it in the form in which it is acquired to highly complex schemes involving a web of

international businesses and investments. Traditionally it has been accepted that the money laundering

process comprises three stages:

Placement – Placement is the first stage of the money laundering process, in which illegal funds or assets

are brought first into the financial system directly or indirectly.

Layering - Layering is the second stage of the money laundering process, in which illegal funds or assets

are moved, dispersed and disguised to conceal their origin. Funds can be hidden in the financial system

through a web of complicated transactions.

Integration - Integration is the third stage of the money laundering process, in which the illegal funds or

assets are successfully cleansed and appeared legitimate in the financial system.

1.4 Why Money Laundering is Done?

� First, money represents the lifeblood of the organization/person that engages in criminal

conduct for financial gain because it covers operating expenses and pays for an extravagant

lifestyle. To spend money in these ways, criminals must make the money they derived illegally

appear legitimate.

� Second, a trail of money from an offense to criminals can become incriminating evidence.

Criminals must obscure or hide the source of their wealth or alternatively disguise ownership or

control to ensure that illicit proceeds are not used to prosecute them.



� Third, the proceeds from crime often becomes the target of investigation and seizure. To shield

ill-gotten gains from suspicion and protect them from seizure, criminals must conceal their

existence or, alternatively, make them look legitimate.

1.5 Predicate Offences

Predicate offences under MLP Act, 2012 are as follows:

� Corruption & bribery.

� Counterfeiting currency.

� Counterfeiting documents.

� Extortion.

� Fraud.

� Forgery.

� Illegal trade of firearms.

� Illegal trade in narcotic drugs, psychotropic substances and substances causing intoxication.

� Illegal trade in stolen and other goods.

� Kidnapping, illegal restrain and hostage taking.

� Murder, grievous physical injury.

� Trafficking of women and children.

� Black marketing.

� Smuggling of domestic and foreign currency.

� Theft or robbery or dacoity or piracy or hijacking of aircraft.

� Human trafficking.

� Dowry.

� Smuggling and offences related to customs and excise duties.

� Tax related offences.

� Infringement of intellectual property rights.

� Terrorism or financing in terrorist activities.

� Adulteration or the manufacture of goods through infringement of title.

� Offences relating to the environment.

� Sexual exploitation.

� Insider trading and market manipulation using price sensitive information relating to the

capital market in share transactions before it is published for general information to take

advantage of the market and attempting to manipulate the market for personal or

institutional gain.

� Organized crime and participation in organized criminal groups.

� Racketeering.

� Any other offence declared as predicate offence by Bangladesh Bank, with the approval of

Govt. by Notification in the official Gazette, for the purpose of this Act.

1.6 Offence of Money Laundering and Punishment:

Punishment against Accused Reporting Organization as per provision of MLP Act, 2012

Clause

No.

Nature of Offense Punishment

23.3 Failing to submit required

information within stipulated time

a) Penalty of Tk. 10,000/= per day up to maximum Tk. 5.00 lac,

b) If such penalty is imposed more than 3 times in a financial year,

license will be cancelled.



23.4 Furnishing false statements a) Penalty of minimum Tk. 20,000/= and maximum Tk. 5.00 lac,



23.5 Failing to comply with any

instruction

a) Penalty of Tk. 10,000/= per day up to maximum Tk. 5.00 lac for

particular non-compliance issue,



23.6 Failing to comply with the

instruction of section 23(1)(Ga)

regarding Account Freezing or

Suspend Order by Bangladesh Bank

Minimum Penalty of that Account Balance which will not more than

double of balance as per instruction circulation date

23.7 Failing to pay the penalty as per

section 23 & 25 of MLPA, 2012

Realize the amount by debiting self named account of related

person/entity/reporting agency with any Bank/Financial

Institution/Bangladesh Bank and if any amount remains unpaid, suit

will be filed for recovery of the same by the order of Court.

23.8 Penalty have been imposed to

Owner, Director and employees

under payroll or contract service of

any reporting agency for non

compliance of AML & CFT

instruction

Individual penalty of minimum Tk. 10,000/= and maximum Tk. 5.00

lac along with administrative disciplinary action.

25.2 Any reporting organization failed to

discharge their responsibility as per

Article 25 (1) of the MLP Act, 2012

like preserving customers proper

and full information, record

keeping for Closed A/C for

minimum 5 (five) years, failure of

submission return/sending STR to

Bangladesh Bank.

a) Penalty of minimum Tk. 50,000/= and maximum Tk. 25.00 lac.

b) Additionally, license will be cancelled of that organization or

branch, service center, booth of that organization.

Punishment against Accused Person or Entity as per provision of MLP Act, 2012

Clause

No

Nature of Offense Punishment

4.2 Attempt, assist and

make conspiracy for

Money Laundering by

any person.

Minimum 4 years and maximum 12 years of imprisonment with

seizure of double the property acquired through ML or Tk. 10 (ten) lac

which one is higher. Additionally, Court can order to forfeit the

property acquired through ML or Predicate Offences of that person

4.4 Attempt, assist and

make conspiracy by any

entity.

Penalty of double the value of property acquired or Tk. 20 (Twenty)

lac which one is higher with cancellation of registration/approval.

5 Defying attachment

order for moveable

properties.

Imprisonment up to 3 years or penalty to the value of attached

property/properties or both.

6.3 Disclosure of

information

Imprisonment up to 2 years or penalty of maximum Tk. 50,000/= or

both.

7.3 Obstructing or non

cooperating in enquiry

Imprisonment up to 01 year or penalty of maximum Tk. 25,000/=or

both.



process

8.2 Providing false

statements

Imprisonment up to 3 years or penalty of maximum Tk. 50,000/= or

both.

1.7 Defining Terrorist Financing

Terrorist financing can simply be defined as financial support, in any form, of terrorism or of those who

encourage, plan, or engage in terrorism. The International Convention for the Suppression of the

Financing of Terrorism (1999) under the United Nations defines TF as follows:

1. If any person commits an offense by any means, directly or indirectly, unlawfully and willingly,

provides or collects funds with the intention that they should be used or in the knowledge that they

are to be used, in full or in part, in order to carry out:

a. An act which constitutes an offence within the scope of and as defined in one of the treaties

listed in the link given below1; or

b. Any other act intended to cause death or serious bodily injury to a civilian, or to any other person

not taking any active part in the hostilities in a situation of armed conflict, when the purpose of

such act, by its nature or context, is to intimidate a population, or to compel a government or an

international organization to do or to abstain from doing an act.

2. For an act to constitute an offense set forth in the preceding paragraph 1, it shall not be necessary

that the funds were actually used to carry out an offense referred to in said paragraph 1,

subparagraph (a) or (b).

Bangladesh has ratified this convention and criminalized terrorism or terrorist activities under section

6(1) of Anti Terrorism Act, 2009 in line with the requirement set out in 9 (nine) conventions and protocols

that were annexed in the convention.

Section 7(1) of Anti Terrorism Act (ATA), 2009, defines terrorist financing as follows-

If any person or entity willfully provides, receives, collects or makes arrangements for money, service or

any other property, whether from legitimate or illegitimate source, by any means, directly or indirectly,

with the intention that, it would, in full or in part, be used-

a. to carry out terrorist activity;

b. by a terrorist person or entity for any purpose, or is in the knowledge that it may be used by a

terrorist person or entity;

the said person or entity shall be deemed to have committed the offence of terrorist financing.

1.8 The Link between Money Laundering and Terrorist Financing

The techniques used to launder money are essentially the same as those used to conceal the sources of

and uses for terrorist financing. But funds used to support terrorism may originate from legitimate

sources, criminal activities or both. Nonetheless, disguising the source of terrorist financing, regardless of

whether the source is of legitimate or illicit origin, is important. If the source can be concealed, it remains

available for future terrorist financing activities. Similarly, it is important for terrorists to conceal the use

of the funds so that the financing activity goes undetected.



As noted above, a significant difference between money laundering and terrorist financing is that the

funds involved may originate from legitimate sources as well as criminal activities. Such legitimate

sources may include donations or gifts of cash or other assets of organizations, such as foundations or

charities that, in turn, are utilized to support terrorist activities or terrorist organizations.

1.9 Targeted Financial Sanctions

The term Targeted Financial Sanctions (TFS) means both asset freezing and prohibition to prevent funds

on other assets from being made available, directly or indirectly, for the benefit of designated persons

and entities. This TFS is a smart solution to combat terrorism, terrorist financing and proliferation

financing of weapons of mass destruction (WMD) by state actors or non-state actors from the UN

Security Council. In contrast with the economic sanction on a jurisdiction, TFS is imposed on only

suspected person or entities while innocent person or entities remain safe.

a. TFS related to terrorism and terrorist financing- FATF recommendation 6 requires ‘Countries

should implement targeted financial sanctions regimes to comply with United Nations Security

Council resolutions relating to the prevention and suppression of terrorism and terrorist

financing. The resolutions require countries to freeze without delay the funds or other assets of,

and to ensure that no funds or other assets are made available, directly or indirectly, to or for the

benefit of, any person or entity either (i) designated by, or under the authority of, the United

Nations Security Council under Chapter VII of the Charter of the United Nations, including in

accordance with resolution 1267 (1999) and its successor resolutions; or (ii) designated by that

country pursuant to resolution 1373 (2001)’.

b. TFS related to Proliferation -FATF recommendation 7 requires ‘Countries’ should implement

targeted financial sanctions to comply with United Nations Security Council resolutions relating

to the prevention, suppression and disruption of proliferation of weapons of mass destruction

and its financing. These resolutions require countries to freeze without delay the funds or other

assets of, and to ensure that no funds and other assets are made available, directly or indirectly,

to or for the benefit of, any person or entity designated by, or under the authority of, the United

Nations Security Council under Chapter VII of the Charter of the United Nations’.

1.10 Powers and Responsibilities of BFIU in Preventing Money Laundering

In restraining and preventing the offence of money laundering:

a. For the purposes of the MLP Act, Bangladesh Bank shall have the following powers and

responsibilities, namely:



i. to analyze or review information related to cash transactions and suspicious

transactions received from any reporting organization and to collect additional

information relating thereto for the purpose of analyzing or reviewing from the

reporting organizations and maintain data on the same and, as the case may be,

provide with the said information to the relevant law enforcement agencies for taking

necessary actions;

ii. ask for any information or obtain a report from reporting organizations with regard to

any transaction in which there are reasonable grounds to believe that the transaction

involves in money laundering or a predicate offence;

iii. issue an order to any reporting organization to suspend or freeze transactions of any

account for a period not exceeding 30 (thirty) days if there are reasonable grounds to

suspect that any money or property has been deposited into the account by

committing any offence: Provided that such order may be extended for additional

period of a maximum of 6 (six) months by 30 (thirty) days, if it appears necessary to

find out correct information relating to transactions of the account;

iv. issue, from time to time, any directions necessary for the prevention of money

laundering to the reporting organizations;

v. monitor whether the reporting organizations have properly submitted information

and reports requested by Bangladesh Bank and whether they have duly complied with

the directions issued by it, and where necessary, carry out on-site inspections of the

reporting organizations to ascertain the same;

vi. arrange meetings and seminars including training for the officers and staff of any

organization or institution, including the reporting organizations, considered

necessary for the purpose of ensuring proper implementation of this Act by

Bangladesh Bank;

vii. Carry out any other functions necessary for the purposes of this Act.

b. If any investigation agency makes a request to provide it with any information in any

investigation relating to money laundering or suspicious transaction, then Bangladesh Bank

shall provide with such information where there is no obligation for it under any existing law

or for any other reason.

c. If any reporting organization fails to provide with the requested information timely under this

Act, Bangladesh Bank may impose a fine on such organization which may extend to a

maximum of taka 5 (five) lacs at the rate of taka 10 (ten) thousand per day and if any

organization is fined more than 3(three) times in 1(one) financial year, Bangladesh Bank may

suspend the registration or licence of the organization or any of its branches, service centers,

booths or agents for the purpose of closing its operation within Bangladesh or, as the case

may be, shall inform the registration or licensing authority about the fact so as to the relevant

authority may take appropriate measures against the organization.

d. If any reporting organization provides with false information or statement requested under

this Act, Bangladesh Bank may impose a fine on such organization not less than taka 20

(twenty) thousand but not exceeding taka 5 (five) lacs and if any organization is fined more

than 3(three) times in 1(one) financial year, Bangladesh Bank may suspend the registration or

license of the organization or any of its branches, service centers, booths or agents for the



purpose of closing its operation within Bangladesh or, as the case may be, shall inform the

registration or licensing authority about the fact so as to the relevant authority may take

appropriate measures against the said organization.

e. If any reporting organization fails to comply with any instruction given by Bangladesh Bank

under this Act, Bangladesh Bank may impose a fine on such organization which may extend to

a maximum of taka 5 (five) lacs at the rate of taka 10 (ten) thousand per day for each of such

non compliance and if any organization is fined more than 3(three) times in 1(one) financial

year, Bangladesh Bank may suspend the registration or license of the organization or any of its

branches, service centers, booths or agents for the purpose of closing its operation within

Bangladesh or, as the case may be, shall inform the registration or licensing authority about

the fact so as to the relevant authority may take appropriate measures against the said

organization.

f. If any reporting organization fails to comply with any order for freezing or suspension of

transaction issued by Bangladesh Bank under clause (c) of sub-section (1), Bangladesh Bank

may impose a fine on such organization not less than the balance held on that account but not

more than twice of the balance held at the time of issuing the order.

g. If any person or entity or reporting organization fails to pay any fine imposed by Bangladesh

Bank under sections 23 and 25 of this Act, Bangladesh Bank may recover the fine from

accounts maintained in the name of the relevant person, entity or reporting organization in

any bank or financial institution or Bangladesh Bank, and in this regard if any amount of the

fine remains unrealized, Bangladesh Bank may, if necessary, make an application before the

court for recovery and the court may pass such order as it deems fit.

h. If any reporting organization is imposed fine under this Act, Bangladesh Bank may also impose

a fine not less than taka 10 (ten) thousand but not exceeding taka 5 (five) lacs on the

responsible owner, directors, officers and staff or persons employed on contractual basis of

that reporting organization and, where necessary, may direct the relevant organization to take

necessary administrative actions.

1.11 Responsibilities of the Reporting Organizations in Preventing Money Laundering

(1) The reporting organizations shall have the following responsibilities in the prevention of money

laundering, (Section 25/1-4) namely:

i. to maintain complete and correct information with regard to the identity of its

customers during the operation of their accounts;

ii. if any account of a customer is closed, to preserve previous records of transactions of

such account for at least 5(five) years from the date of such closure;

iii. to provide with the information maintained under paragraphs 1.11(a)(i) and 1.11(a)(ii) to

Bangladesh Bank from time to time, on its demand;



iv. if any doubtful transaction or attempt of such transaction as defined under clause (n) of

section 2 is observed, to report the matter as suspicious transaction report‘ to the

Bangladesh Bank immediately on its own accord.

1.12 Why We must Combat ML & TF?

� Money laundering has potentially devastating economic, security, and social consequences.

Money laundering is a vital process to make crime worthwhile.

� It provides the fuel for drug dealers, smugglers, terrorists, illegal arms dealers, corrupted

public officials, and others to operate and expand their criminal enterprises.

� This drives up the cost of government due to the need for increased law enforcement and

health care expenditures (for example, for treatment of drug addicts) to combat the serious

consequences resulted from ML & TF.

� Money laundering diminishes government tax revenue and therefore indirectly harms honest

taxpayers and it also makes government tax collection activities more difficult.

� Money laundering distorts assets and commodity prices and leads to misallocation of

resources. For financial institutions it can lead to an unstable liability base and to unsound

asset structures thereby creating risks of monetary instability and even systemic crisis. The

loss of credibility and investor’s confidence, that such crisis can bring, has the potential of

destabilizing financial systems, particularly in smaller economies.

� One of the most serious microeconomic effects of money laundering is felt in the private

sector. Money launderers often use front companies, which co-mingle the proceeds of illicit

activity with legitimate funds, to hide the ill-gotten gains. These front companies have access

to substantial illicit funds, allowing them to subsidize front company products and services at

levels well below market rates. This makes it difficult, if not impossible, for legitimate

business to compete against front companies with subsidized funding, a situation that can

result in the crowding out of private sector business by criminal organizations.

� Among its other negative socioeconomic effects, money laundering transfers economic

power from the market, government, and citizens to criminals. Furthermore, the sheer

magnitude of the economic power that accrues to criminals from money laundering has a

corrupting effect on all elements of society.

� The social and political costs of laundered money are also serious as laundered money may

be used to corrupt national institutions. Bribing of government officials undermines the

moral fabric in society, and, by weakening collective ethical standards, corrupts our

democratic institutions. When money laundering goes unchecked, it encourages the

underlying criminal activity from which such money is generated.

� A nation cannot afford to have its reputation and financial institutions tarnished by

involvement with money laundering, especially in today's global economy. Money laundering

erodes confidence in financial institutions (FIs) and the underlying criminal activities like

fraud, counterfeiting, narcotics traffi

standing of any financial institution. Actions taken by FIs to prevent money laundering are

not only a regulatory requirement, but also an act of self

tainted by money launde

loss their good market reputation and damage the reputation of the country. It is very

difficult and requires significant resources to rectify a problem that could be prevented with

proper program.

� Besides its effect on macro level, ML & TF also affects individual financial institution. If a

money launderer uses a financial institution for making his/her money legitimate, the

business of that financial institution may hamper. If the money laun

deposited money from an FI before maturity, the FI will face liquidity crisis if the amount is

big enough. Moreover, if it is found that an FI was used for ML & TF activities, and it did not

take proper action against that ML & TF a

legal risk. Finally, the reputation of an FI can also be heavily affected through its involvement

with ML & TF activities.

1.13 International Initiatives towards AML/CFT:

In response to the growing concern about money laundering and terrorist activities, the initiatives taken

by international community has acted on many fronts. This part of this Guidelines

various international organizations and their initiatives relating to anti

combating the financing of terrorism (CFT).

practices and instruments which can be useful in bui

ML, FT & PF.

1.14 National Initiatives on ML & TF:

In line with international efforts, Bangladesh has also taken many initiatives to prevent money laundering

and combating financing of terrorism and prolifer

severe effects on the country.

United Nations

The Vienna Convention

The Palermo Convention

International Convention for the Suppression of the Financing of Terrorism

Security Council Resolution 1267 & Successors

Security Council Resolution 1373

The Counter-Terrorism Committee

Global Program against Money Laundering


fraud, counterfeiting, narcotics trafficking, and corruption weaken the reputation and


not only a regulatory requirement, but also an act of self-interest. A financial institution

tainted by money laundering accusations from regulators, law enforcement agencies, may



Besides its effect on macro level, ML & TF also affects individual financial institution. If a


business of that financial institution may hamper. If the money launderer withdraws his/her



take proper action against that ML & TF as per the laws of the country, the FI will have to face


with ML & TF activities.

International Initiatives towards AML/CFT:

n about money laundering and terrorist activities, the initiatives taken

by international community has acted on many fronts. This part of this Guidelines mentions

various international organizations and their initiatives relating to anti-money laundering (AML) and

combating the financing of terrorism (CFT). These organizations have developed various

which can be useful in building awareness & knowledge on and combating the

National Initiatives on ML & TF:


and combating financing of terrorism and proliferation of weapons of mass destructions considering their

The Financial Action Task Force

FATF 40 Recommendations

FATF New Standards

Monitoring Members Progress

The NCCT List

ICRG

The Basel Committee on

Banking Supervision

Statement of Principles on Money

Laundering

Basel Core Principles for Banking

Customer Due Diligence

Organizations

The Egmont Group

Intelligence Units

Asia Pacific Group

Laundering (APG)


cking, and corruption weaken the reputation and


interest. A financial institution

ring accusations from regulators, law enforcement agencies, may



Besides its effect on macro level, ML & TF also affects individual financial institution. If a


derer withdraws his/her



s per the laws of the country, the FI will have to face


n about money laundering and terrorist activities, the initiatives taken

mentions names of the

money laundering (AML) and

These organizations have developed various documents,

lding awareness & knowledge on and combating the


ation of weapons of mass destructions considering their

Other Organizations

International Organization of

Securities Commissions

The Egmont Group of Financial

Intelligence Units

Asia Pacific Group on Money

Laundering (APG)

National initiatives in AML/CFT aspect are as follows

Legal Frame work

MLPA 2012 & Amedment 2015

Money Laundering Prevention Rules 2013

ATA 2009, Amendemnt 2012 & 2013

Anti- Terrorism Rules 2013

Mutual Legal Assistane in Criminal Matters Act 2012

Mutual Legal Assistane in Criminal Matters Rules 2012


National initiatives in AML/CFT aspect are as follows:

National Vigilance

Central and Regional Taskforce

Anti-Money Laundering Department

Bangladesh Financial Intelligence Unit

National Coordination Committee and Working

Committee

CAMLCO Conference

Cooridantion with International Level

Founding Member of APG

Egmont Group Memberships

MoU Between ACC & BFIU

Coordination on the Implementaion of the

UNSCR

Implementtion of TFs

Others Inititives


Others Inititives

National ML & TF Risk Assessment

(NRA)

National Stretagy for Preventing ML

& TF

Risk Based Approach



CHAPTER 02

Risk Based Approach (RBA)

2.1 What is the RBA?

According to FATF:

a. A RBA to AML/CFT means that countries, competent authorities and financial institutions, are

expected to identify, assess and understand the ML/TF risks to which they are exposed and

take AML/CFT measures commensurate to those risks in order to mitigate them effectively.

b. When assessing ML/TF risk, countries, competent authorities, and financial institutions should

analyze and seek to understand how the ML/TF risks they identify affect them; the risk

assessment therefore provides the basis for the risk-sensitive application of AML/CFT

measures. The RBA is not a “zero failure” approach; there may be occasions where an

institution has taken all reasonable measures to identify and mitigate AML/CFT risks, but it is

still used for ML or TF purposes.

c. A RBA does not exempt countries, competent authorities and financial institutions from

mitigating ML/TF risks where these risks are assessed as low.

2.2 What is Required for RBA?

2.2.1 Assessing risk - Banks should be required to take appropriate steps to identify and assess

their money laundering and terrorist financing risks for customers, countries or geographic

areas, products, services and transactions or delivery channels. They should document

those assessments in order to be able to demonstrate their basis, keep these assessments

up to date, and have appropriate mechanisms to provide risk assessment information to

competent authorities.

2.2.2 Risk management and mitigation - Banks should be required to have policies, controls and

procedures that enable them to manage and mitigate effectively the risks that have been

identified. They should be required to monitor the implementation of those controls and to

enhance them, if necessary. The policies, controls and procedures must be approved by

senior management, and the measures taken to manage and mitigate the risks (whether

higher or lower) should be consistent with national requirements and with guidance from

competent authorities.

2.2.3 Higher risk - Where higher risks are identified banks should be required to take enhanced

measures to manage and mitigate the risks.

2.2.4 Lower risk - Where lower risks are identified, countries may allow banks to take simplified

measures to manage and mitigate those risks.

2.2.5 When assessing risk, banks should consider all the relevant risk factors before determining

what is the level of overall risk and the appropriate level of mitigation to be applied. Banks

may differentiate the extent of measures, depending on the type and level of risk for the

various risk factors (e.g. in a particular situation, they could apply normal CDD for customer

acceptance measures, but enhanced CDD for ongoing monitoring, or vice versa)



2.3 Obligation for ML & TF Risk Assessment and Management

a. Recommendation 1 of Financial Action Task Force (FATF), the international standard setter on

anti money laundering (AML) and combating terrorist financing (CTF) states that countries

should require 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.

b. Rule 21 of MLPR 2013 states that every Reporting Organization-Financial Institution (RO-FI)

shall conduct periodic risk assessment and forward the same to the Bangladesh Financial

Intelligence Unit (BFIU) for vetting. Rule 21 also states that RO-FI shall utilize this risk

assessment report after having vetted by BFIU.

c. Money Laundering Prevention Act, 2012 empowers BFIU sufficiently to establish a sound and

efficient AML&CFT regime. Every reporting agency has to comply with the instructions issued

by BFIU under the power of Money Laundering Prevention Act (MLPA), 2012 and Anti Terrorism

Act (ATA), 2009 (including all amendments).

2.4 What is Risk?

Risk can be defined as the combination of the probability of an event and its consequences. In

simple term, risks can be seen as a combination of the chance that something may happen and the

degree of damage or loss that may result if it does occur.

2.5 What is Risk Management?

Risk management is a systematic process of recognizing risk and developing methods to both

minimize and manage the risk. This requires the development of a method to identify, prioritize,

treat (deal with), control and monitor risk exposures. In risk management, a process is followed

where the risks are assessed against the likelihood (chance) of them occurring and the severity or

amount of loss or damage (impact) which may result if they do happen.

2.6 Which Risk do Banks Needs to Manage?

For the ML&TF aspects, BFIU expects a risk management practice to address two main risks:

business risk and regulatory risk.

a. Business risk is the risk that your business may be used for ML&TF. The banks must assess the

following risks in particular:

� customer risks

� products or services risks

� business practices and/or delivery method risks

� country or jurisdictional risks.

b. Regulatory risk is associated with not meeting all obligations of banks under the Money

Laundering Prevention Act, 2012, Anti Terrorism Act, 2009 (including all amendments), the

respective Rules issued under these two acts and instructions issued by BFIU. Examples of

regulatory obligations are failure to report STR/SAR, unable or inappropriately verification of



customers and lacking of AML&CFT program (how a business identifies and manages the

ML&TF risk it may face) etc.

It is unrealistic that a bank would operate in a completely ML&TF risk-free environment.

Therefore, it is suggested that a bank shall identifies the ML&TF risk it faces, and then works

out the best ways to reduce and manage that risk.

2.7 Risk Management Process

2.7.1 Risk Identification

The first step is to identify what ML&TF risks exist in a bank when providing designated

services. Some examples of ML&TF risks associated with different banking activities:

a. Retail banking: provision of services to cash-intensive businesses, volume of

transactions, high-value transactions, diversity of services.

b. Corporate banking: where banks provide corporate finance and corporate banking

products and investment services to corporations, governments and institutions

c. Wealth management: culture of confidentiality, difficulty to identify beneficial owners,

concealment (use of offshore trusts), banking secrecy, complexity of financial services

and products, PEPs, high value transactions, multiple jurisdictions.

d. Investment banking: layering and integration transfer of assets between parties in

exchange for cash or other assets, global nature of markets.

e. Correspondent banking: high value transactions, limited information about the

remitter and source of funds especially when executing transactions with a bank

located in a jurisdiction that does not comply or complies insufficiently with FATF

Recommendations, the possibility that PEPs are involved regarding the ownership of a

bank.

f. Business Risks: A bank must consider the risk posed by any element or any

combination of the elements listed below:

� Customers: followings are some indicators (but not limited to) to identify ML&TF

risk arises from customers of a bank:

� a new customer;

� a new customer who wants to carry out a large transaction;

� a customer or a group of customers making lots of transactions to the same

individual or group;

� a customer who has a business which involves large amounts of cash;

� a customer whose identification is difficult to check;

� a customer who brings in large amounts of used notes and/or small

denominations;

� customers conducting their business relationship or transactions in unusual

circumstances, such as: significant and unexplained geographic distance



between the institution and the location of the customer, frequent and

unexplained movement of accounts to different institutions, frequent and

unexplained movement of funds between institutions in various geographic

locations;

� a nonresident customer;

� a corporate customer whose ownership structure is unusual and excessively

complex;

� customers that are politically exposed persons (PEPs) or influential persons

(IPs) or head of international organizations and their family members and close

associates;

� customers submits account documentation showing an unclear ownership

structure;

� customer opens account in the name of his/her family member who intends to

credit large amount of deposits not consistent with the known sources of

legitimate family income.

� Products and services:

� private banking i.e., prioritized or privileged banking;

� credit card;

� anonymous transaction;

� non face to face business relationship or transaction;

� payment received from unknown or unrelated third parties;

� any new product & service developed;

� service to walk-in customers;

� mobile banking.

� Business practices/delivery methods:

� direct to the customer;

� online/internet;

� phone;

� Fax;

� Email;

� third-party agent or broker.

� Channels Countries it does business in/with (jurisdictions):

� any country which is unidentified by credible sources as having significant level

of corruption and criminal activity;

� any country subject to economic or trade sanctions;

� any country known to be a tax haven and unidentified by credible sources as

providing funding or support for terrorist activities or that have designated

terrorist organizations operating within their country;

� any country unidentified by FATF or FSRBs as not having adequate AML&CFT

system;

� any country indentified as destination of illicit financial flow.



g. Regulatory Risks: This risk is associated with not meeting the requirements of the

Money laundering Prevention Act, 2012, Anti Terrorism Act, 2009 (including all

amendments) and instructions issued by BFIU. Examples of some of these risks are:

� customer/beneficial owner identification and verification not done properly;

� failure to keep record properly;

� failure to scrutinize staffs properly;

� failure to train staff adequately;

� not having an AML&CFT program;

� failure to report suspicious transactions or activities;

� not submitting required report to BFIU regularly;

� not having an AML&CFT Compliance Officer;

� failure of doing Enhanced Due Diligence (EDD) for high risk customers (i.e., PEPs,

IPs);

� not complying with any order for freezing or suspension of transaction issued by

BFIU or BB;

� not submitting accurate information or statement requested by BFIU or BB.

2.7.2 Risk Assessment and Evaluation

a. Having identified the risks involved, they need to be assessed or measured in terms of the

chance (likelihood) they will occur and the severity or amount of loss or damage (impact)

which may result if they do occur. The risk associated with an event is a combination of the

chance (likelihood) that the event will occur and the seriousness of the damage (impact) it

may do. Therefore each risk element can be rated by:

� the chance of the risk happening – ‘likelihood’ ; and

� the amount of loss or damage if the risk happened – ‘impact’ (consequence).

To help assess the risks identified in the first stage of this process, we can apply the risk rating

scales for likelihood and impact and from these get a level of risk or risk score using the risk

matrix.

LIKELIHOOD X IMPACT = RISK LEVEL/SCORE

b. Likelihood Scale: A likelihood scale refers to the potential of an ML&TF risk occurring in the

business for the particular risk being assessed. Three levels of likelihood of an ML & TF risk

are shown by BFIU, but the entity can have as many as they believe are necessary:

� Very likely - Almost certain, it will probably occur several times a year;

� Likely- High probability it will happen once a year ;

� Unlikely- Unlikely, but not impossible.

c. Impact Scale: An impact scale refers to the seriousness of the damage (or otherwise) which

could occur should the event (risk) happen. Three levels of impact of an ML & TF risk are

shown by BFIU, but the bank can have as many as they believe are necessary.

� Major- huge consequences, major damage or effect. Serious terrorist act or large-

scale money laundering.



� Moderate- moderate level of money laundering or terrorism financing impact.

� Minor- minor or negligible consequences or effects.

d. Risk Matrix and Risk Score: Risk matrix can be used to combine LIKELIHOOD and IMPACT to

obtain a risk score. The risk score may be used to aid decision making and help in deciding

what action to take in view of the overall risk. Four levels of risk score of an ML & TF risk are

shown by BFIU but the bank can have as many as they believe are necessary:

� 4 Extreme - risk almost sure to happen and/or to have very serious consequences.

Response: Do not allow transaction to occur or reduce the risk to acceptable level.

� 3 High - risk likely to happen and/or to have serious consequences.

Response: Do not allow transaction until risk reduced.

� 2 Medium - possible this could happen and/or have moderate consequences.

Response: May go ahead but preferably reduce risk.

� 1 Low - unlikely to happen and/or have minor or negligible consequences.

Response: Okay to go ahead.

e. Risk Assessment and Management Exercise: From the above discussion, the banks will

have an idea to calculate risk score by blending likelihood and impact, the risk matrix and

risk score and can assess the risks of individual customer, product/service, delivery channel

and risks related to geographic region by using the simplified risk management worksheet. It

can also fix up its necessary actions against the particulars outcomes of risks. All the exercises

done by the banks would be called together "Risk Registrar".

2.7.3 Risk Treatment

This stage is about identifying and testing methods to manage the risks the bank may have

identified and assessed in the previous process. In doing this they will need to consider putting into

place strategies, policies and procedures to help reduce (or treat) the risk. Examples of a risk

reduction or treatment step are:

� setting transaction limits for high-risk products;

� having a management approval process for higher-risk products;

� process to place customers in different risk categories and apply different identification and

verification methods;

� not accepting customers who wish to transact with a high-risk country.

2.7.4 Monitoring and Review

Keeping records and regular evaluation of the risk plan and AML&CFT program is essential. The risk

management plan and AML&CFT program cannot remain static as risks change over time; for

example, changes to customer base, products and services, business practices and the law.

Once documented, the entity should develop a method to check regularly on whether AML& CFT

program is working correctly and well. If not, the entity needs to work out what needs to be

improved and put changes in place. This will help keep the program effective and also meet the

requirements of the AML&CFT Acts and respective Rules.



2.8 Risk Management Strategies

The banks may adopt the following components (where appropriate to the nature, size and

complexity of its business), among others, as part of its risk management strategy:

� reviews at senior management level of the bank’s progress towards implementing stated

ML&TF risk management objectives;

� clearly defined management responsibilities and accountabilities regarding ML&TF risk

management;

� adequate staff resources to undertake functions associated with ML&TF risk management d)

specified staff reporting lines from ML&TF risk management system level to board or senior

management level, with direct access to the board member(s) or senior manager(s)

responsible for overseeing the system;

� procedural controls relevant to particular designated services;

� documentation of all ML&TF risk management policies;

� a system, whether technology based or manual, for monitoring the bank’s compliance with

relevant controls;

� policies to resolve identified non-compliance;

� appropriate training program(s) for staff to develop expertise in the identification of ML&TF

risk(s) across the bank’s designated services;

� an effective information management system which should:

� produce detailed and accurate financial, operational and compliance data relevant to

ML&TF risk management;

� incorporate market information relevant to the global AML&CFT environment which may

assist the banks to make decisions regarding its risk management strategy;

� enable relevant, accurate and timely information to be available to a relevant officer (for

example, the AML&CFT Compliance Officer) within the banks;

� allow the banks to identify, quantify, assess and monitor business activities relevant to

ML&TF risk(s);

� allow the banks to monitor the effectiveness of and compliance with its internal

AML&CFT systems and procedures;

� allow the banks to regularly assess the timeliness and relevance of information

generated, together with its adequacy, quality and accuracy.

2.9 Ongoing Risk Monitoring

A bank’s ongoing monitoring of its risk management procedures and controls may also alert the

bank to any potential failures including (but not limited to):

� failure to include all mandatory legislative components;

� failure to gain board and/or executive approval of the AML&CFT program;

� insufficient or inappropriate employee due diligence;

� frequency and level of risk awareness training not aligned with potential exposure to ML&TF

risk(s;

� changes in business functions which are not reflected in the AML&CFT program (for

example, the introduction of a new product or distribution channel);



� failure to undertake independent review (at an appropriate level and frequency) of the

content and application of the AML&CFT program;

� legislation incorrectly interpreted and applied in relation to a customer identification

procedure;

� customer identification and monitoring systems, policies and procedures that fail to:

� prompt, if appropriate, for further identification and/or verification when the ML&TF

risk posed by a customer increases;

� detect where a customer has not been sufficiently identified and prevent the customer

from receiving the designated service;

� take appropriate action where a customer provides insufficient or suspicious

information in relation to an identification check;

� take appropriate action where the identification document provided is neither an

original nor a certified copy;

� recognize foreign identification documentation issued by a high risk jurisdiction vi)

record comprehensive details of identification documents, for example, the date of

issue;

� consult appropriate resources in order to identify high-risk customers;

� identify when an expired or old identification document (for example, a driver’s license)

has been used;

� collect any other name(s) by which the customer is known;

� lack of access to information sources to assist in identifying higher risk customers (and the

jurisdictions in which they may reside), such as PEPs, terrorists and narcotics traffickers;

� lack of ability to consistently and correctly train staff and/or third parties, particularly in areas

with high turnover in:

� customer identification policies, procedures and systems;

� identifying potential ML&TF risks

� acceptance of documentation that may not be readily verifiable.

2.10 Higher Risk Scenario

When assessing the money laundering and terrorist financing risks relating to types of customers,

countries or geographic areas, and particular products, services, transactions or delivery channels,

examples of potentially higher-risk situations include the following:

a. Customer risk factors:

� The business relationship is conducted in unusual circumstances (e.g. significant

unexplained geographic distance between the financial institution and the customer);

� Non-resident customers;

� Legal persons or arrangements that are personal asset-holding vehicles;

� Companies that have nominee shareholders or shares in bearer form;

� Business that are cash-intensive;

� The ownership structure of the company appears unusual or excessively complex given

the nature of the company’s business.



b. Country or geographic risk factors:

� Countries identified by credible sources, such as mutual evaluation or detailed

assessment reports or published follow-up reports, as not having adequate AML&CFT

systems;

� Countries subject to sanctions, embargos or similar measures;

� Countries identified by credible sources as having significant levels of corruption or

other criminal activity;

� Countries or geographic areas identified by credible sources as providing funding or

support for terrorist activities, or that have designated terrorist organizations operating

within their country.

c. Product, service, transaction or delivery channel risk factors:

� Private banking;

� Anonymous transactions (which may include cash);

� Non-face-to-face business relationships or transactions;

� Payment received from unknown or un-associated third parties.

2.11 Lower Risk Scenario

There are circumstances where the risk of money laundering or terrorist financing may be lower.


countries or geographic areas, and particular products, services, transactions or delivery channels,

examples of potentially lower risk situations include the following:

a. Customer risk factors:

� Banks – where they are subject to requirements to combat money laundering and

terrorist financing consistent with the FATF Recommendations, have effectively

implemented those requirements, and are effectively supervised or monitored in

accordance with the Recommendations to ensure compliance with those requirements;

� Public companies listed on a stock exchange and subject to disclosure requirements (either

by stock exchange rules or through law or enforceable means), which impose requirements

to ensure adequate transparency of beneficial ownership;

� Public administrations or enterprises.

b. Product, service, transaction or delivery channel risk factors:

� Financial products or services that provide appropriately defined and limited services to

certain types of customers, so as to increase access for financial inclusion purposes.

c. Country risk factors:

� Countries identified by credible sources, such as mutual evaluation or detailed ssessment

reports, as having effective AML&CFT systems;

� Countries identified by credible sources as having a low level of corruption or other criminal

activity. In making a risk assessment, countries or financial institutions could, when



appropriate, also take into account possible variations in money laundering and terrorist

financing risk between different regions or areas within a country.

d. Note that having a lower money laundering and terrorist financing risk for identification and

verification purposes does not necessarily mean that the same customer poses lower risk for

all types of CDD measures, in particular for ongoing monitoring of transactions.

2.12 Risk Variables


countries or geographic areas, and particular products, services, transactions or delivery channels

risk, a bank should take into account risk variables relating to those risk categories. These

variables, either singly or in combination, may increase or decrease the potential risk posed, thus

impacting the appropriate level of CDD measures. Examples of such variables include:

� The purpose of an account or relationship;

� The level of assets to be deposited by a customer or the size of transactions undertaken;

� The regularity or duration of the business relationship.

2.13 Counter Measures for Risks

a. Enhanced due diligence measures:

Banks should examine, as far as reasonably possible, the background and purpose of all

complex, unusual large transactions, and all unusual patterns of transactions, which have no

apparent economic or lawful purpose. Where the risks of money laundering or terrorist

financing are higher, banks should be required to conduct enhanced due diligence (EDD)

measures for higher-risk business relationships which include:

� Obtaining and verifying additional information on the customer (e.g. occupation,

volume of assets, information available through public databases, internet, etc.), and

updating more regularly the identification data of customer and beneficial owner;

� Obtaining and verifying additional information on the intended nature of the business

relationship;

� Obtaining and verifying information on the source of funds or source of wealth of the

customer;

� Obtaining and verifying information on the reasons for intended or performed

transactions;

� Obtaining and verifying the approval of senior management to commence or continue

the business relationship;

� Conducting enhanced monitoring of the business relationship, by increasing the number

and timing of controls applied, and selecting patterns of transactions that need further

examination;

� Requiring the first payment to be carried out through an account in the customer’s name

with a bank subject to similar CDD standards.



b. Simplified CDD measures

Where the risks of money laundering or terrorist financing are lower, the banks are allowed to

conduct simplified CDD measures, which should take into account the nature of the lower risk.

The simplified measures should be commensurate with the lower risk factors (e.g. the

simplified measures could relate only to customer acceptance measures or to aspects of

ongoing monitoring). Examples of possible measures are:

� Verifying the identity of the customer and the beneficial owner after the establishment of

the business relationship (e.g. if account transactions rise above a defined monetary

threshold);

� Reducing the frequency of customer identification updates;

� Reducing the degree of on-going monitoring and scrutinizing transactions, based on a

reasonable monetary threshold;

� Not collecting specific information or carrying out specific measures to understand the

purpose and intended nature of the business relationship, but inferring the purpose and

nature from the type of transactions or business relationship established.

Simplified CDD measures are not acceptable whenever there is a suspicion of money laundering

or terrorist financing, or where specific higher-risk scenarios apply.

2.14 Ongoing Due Diligence

Banks should be required to ensure that documents, data or information collected under the CDD

process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for

higher-risk categories of customers.



CHAPTER 03

Objectives, Scope and Compliance Structure of the Bank

3.1 Objectives

EXIM Bank has developed this compliance program with a view to:

a. Preventing Money Laundering, Terrorist Financing & Proliferation Financing;

b. Ensuring the implementation of required provisions of Acts, Rules and Directives of BFIU; and

c. Building awareness among the all employees, members of the Board of Directors, owners

and customers of EXIM Bank about the importance of AML & CFT.

3.2 Scope

This program sets out:

a. The obligations of EXIM Bank with respect to the requirements imposed under the MLPA-

2012, ATA-2009 & BFIU Directives;

b. Requirements imposed on in implementing a comprehensive risk-based approach in

managing ML/TF risks; and

c. Roles & Responsibilities of the Board of Directors, Senior Management, CAMLCO & BAMLCO

in putting in place the relevant AML/CFT measures.

3.3 Applicability

These guidelines are applicable to:

a. All business activities and/or transactions; products & services of EXIM Bank including its’

Branches and subsidiaries;

b. “Transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or the

arrangement thereof and includes:

i. opening of an account;

ii. deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in

cash or by cheque, payment order or other instruments or by electronic or other non-

physical means;

iii. the use of a safety deposit box or any other form of safe deposit; entering into any

fiduciary relationship;

iv. any payment made or received in whole or in part of any contractual or other legal

obligation; or

v. establishing or creating a legal person or legal arrangement.

3.4 Compliance Policy Statements:

a. That In order to protect Banks reputation and to meet its legal and regulatory obligations, it is

essential that Bank shall minimize the risk of being used by Money Launderers & terrorist

financiers. With that end in view it will be an obligatory responsibility for all Bank Officials,



customers and management of the Bank to realize and combat the situation on these critical

risk issues of ML, TF & PF.

b. That Keeping the AML & CFT issues in mind, EXIM Bank must develop, administer, and

maintain a written AML & CFT compliance program duly approved by the Board of Directors

that ensures and monitors compliance with the Acts, Rules & BFIU directives including record

keeping and reporting requirements;

c. That the written AML&CFT compliance program establish clear line of responsibilities,

accountabilities & reporting within the organization to ensure that policies, procedures, and

controls are introduced and maintained which can deter criminals from using our facilities for

money laundering and the financing of terrorist activities, thus ensuring that we comply with

our obligations under the law;

d. That the program is tailored to the our bank and are based upon an assessment of the money

laundering and terrorist financing risks, taking into account the bank's business structure and

factors such as its size, location, activities, methods of payment, and risks or vulnerabilities to

money laundering and terrorist financing;

e. That it includes standards and procedures to comply with applicable laws and regulations to

reduce the prospect of criminal abuse; addresses our ‘Know Your Customer’ (“KYC”) policy and

identification procedures before opening new accounts, monitoring existing accounts for

unusual or suspicious activities, information flows, reporting suspicious transactions, hiring and

training employees and a separate audit or internal control function to regularly test the

program’s effectiveness;

f. That It also includes a description of the roles the AML&CFT Compliance Officers(s)/Unit and

other appropriate personnel who will play significant roles in monitoring compliance with and

effectiveness of AML&CFT policies and procedures.

g. That It develops and implements screening programs to ensure high standards when hiring

employees; implements standards for employees who consistently fail to perform in

accordance with an AML&CFT framework; incorporates AML&CFT compliance into job

descriptions and performance evaluations of appropriate personnel; and has the arrangements

for program continuity despite changes in management or employee composition or structure;

h. That the AML&CFT program to be reviewed regularly and updated as necessary and at least

annually based on any legal/regulatory or business/operational changes, such as additions or

amendments to existing AML&CFT related rules and regulations or business.

i. That it is the responsibility of every employee to protect the institution from exploitation by

money launderers and terrorist financiers, and officials will be held responsible for non-

compliance with the applicable laws and the institution’s policy including the criminal, civil and

disciplinary penalties and reputational harm that may ensue from any bank with money

laundering and terrorist financing activity.

j. That it is the responsibility of the every individual to become familiar with the rules and

regulations that relate to his or her assignment. Ignorance of the rules and regulations is no

excuse for non-compliance.

k. That EXIM Bank will support government, law enforcement agencies and Bangladesh Bank in

their efforts to combat the use of the financial system for the laundering of the proceeds of

crime or the movement of funds for criminal purposes.



3.5 Roles and Responsibilities of Board of Directors

The Board of Directors (Board) have the following roles and responsibilities:

a. shall understand their roles and responsibilities in managing ML/TF risks faced by the bank as

reporting institution;

b. must be aware of the ML/TF risks associated with business strategies, delivery channels and

geographical coverage of its business products and services;

c. understand the AML/CFT measures required by the laws including the MLPA, 2012 & ATA,

2009 and the industry's standards and best practices as well as the importance of

implementing AML/CFT measures to prevent the bank from being abused by money

launderers and financiers of terrorism;

d. maintain accountability and oversight for establishing AML/CFT policies and minimum

standards;

e. approve policies regarding AML/CFT measures within the reporting institution, including

those required for risk assessment, mitigation and profiling, CDD, record keeping, on-going

due diligence, reporting of suspicious transactions and combating the financing of terrorism;

f. establish appropriate mechanisms to ensure the AML/CFT policies are periodically reviewed

and assessed in line with changes and developments in the bank’s products and services,

technology as well as trends in ML/TF;

g. establish an effective internal control system for AML/CFT and maintain adequate oversight

of the overall AML/CFT measures undertaken by the bank;

h. define the lines of authority and responsibility for implementing the AML/CFT measures and

ensure that there is a separation of duty between those implementing the policies and

procedures and those enforcing the controls;

i. ensure effective internal audit function in assessing and evaluating the robustness and

adequacy of controls implemented to prevent ML/TF;

j. assess the implementation of the approved AML/CFT policies through regular reporting and

updates by the Senior Management and Audit Committee; and

k. establish MIS that is reflective of the nature of the bank’s operations, size of business,

complexity of business operations and structure, risk profiles of products and services of

offered and geographical coverage.

3.6 Roles and Responsibilities of Senior Management

The Senior Management have the following roles and responsibilities:

a. be aware of and understand the ML/TF risks associated with business strategies, delivery

channels and geographical coverage of its business products and services offered and to be

offered including new products, new delivery channels and new geographical coverage;



b. formulate AML/CFT policies to ensure that they are in line with the risks profiles, nature of

business, complexity, volume of the transactions undertaken by the bank and its geographical

coverage;

c. establish appropriate mechanisms and formulate procedures to effectively implement

AML/CFT policies and internal controls approved by the Board, including the mechanism and

procedures to monitor and detect complex and unusual transactions;

d. undertake review and propose to the Board the necessary enhancements to the AML/CFT

policies to reflect changes in the bank’s risk profiles, institutional and business structure,

delivery channels and geographical coverage;

e. provide timely periodic reporting to the Board on the level of ML/TF risks facing the bank,

strength and adequacy of risk management and internal controls implemented to manage

the risks and the latest development on AML/CFT which may have an impact on the bank;

f. convey a clear signal that the corporate culture is as concerned about its reputation as it is

about profits, marketing, and customer service;

g. communicate clearly to all employees on an annual basis by a statement from the CEO or

MD that clearly sets forth its policy against ML, TF & PF and any activity which facilitates

money laundering or the funding of terrorist or criminal activities. Such a statement should

evidence the strong commitment of the bank to comply with all laws and regulations

designed to combat money laundering and terrorist financing;

h. allocate adequate resources to effectively implement and administer AML/CFT compliance

programs that are reflective of the size and complexity of the bank’s operations and risk

profiles;

i. appoint a chief anti-money laundering compliance officer (CAMLCO) at management level at

Head Office and designate a compliance officer at management level at each branch or

subsidiary;

j. provide appropriate level of AML/CFT training for its employees at all levels throughout the

organization;

k. ensure that bank's HR Policy includes at least following issues for proper implementation of

AML &CFT measures:

i. proper administrative sanction (proportionate and dissuasive) for non-compliance of

AML & CFT measures;

ii. proper weight should be given in the annual performance evaluation of employees

for extra ordinary preventive action vis-a-vis for non-compliance;

iii. written procedure to recover the fined amount from the concerned employee if the

fine imposed on employee by the BFIU;

iv. other measures that shall be taken in case of non-compliance by the bank;

l. ensure that there is a proper channel of communication in place to effectively communicate

the AML/CFT policies and procedures to all levels of employees;



m. ensure that AML/CFT issues raised are addressed in a timely manner; and

n. ensure the integrity of its employees by establishing appropriate employee assessment

system.

3.7 Statement of Commitment of CEO & MD

Statement of commitment of CEO or MD of a bank shall include the followings:-

� bank’s policy or strategy to prevent ML, TF & PF;

� emphasize on effective implementation of bank’s AML & CFT compliance program;

� clear indication of balance between business and compliance, risk and mitigating measures;

� compliance is the responsibility of each employee during their normal course of assignment

and ignorance shall not be considered as the excuse for non-compliance;

� point of contact for clarification in case of any ambiguity arise; and

� consequences of non-compliance as per human resources (HR) policy of the bank.

3.8 Organizational Structure for Implementation of AML & CFT Program

Remittance Incharge

Relationship Manager

Operation Manager

Deposit Incharge

A/C Opening Officer

Officer (IT) BAMLCO

Foreign Exchange Incharge Investment Incharge

CCU MD & CEO

CAMLCO

DCAMLCO

AVP (IT)

SPO Officer (IT)

VP

PO EO



3.9 Formation of Central Compliance Unit (CCU)

Obligations under BFIU Circular Section 1.3 of BFIU Circular-10; dated- 28/12/2014

To keep the banking sector free from the risks related to Money Laundering & Terrorist Financing and for

the effective/proper compliance of all existing acts, rules and instructions issued by BFIU time to time,

EXIM Bank must set up a Central Compliance Unit (CCU) that will be directly monitored by the Managing

Director or the Chief Executive Officer of the bank as following:

• CCU shall be established in the head office of the bank or any suitable place as a permanent set-

up with specific organogram like other department or division of a bank and headed by a high

official who will be known as the ‘Chief Anti Money Laundering Compliance Officer (CAMLCO). In

this case, ‘High official’ will be considered as an official up to 2 (two) steps below of the managing

director/ chief executive officer.

• The bank may also nominate one or more deputy of the CAMLCO, who will be known as the

Deputy Chief Anti Money Laundering Compliance Officer (D-CAMLCO). The D-CAMLCO will be at

least in the rank of ‘Vice President’ of the bank.

• It will be comprised of adequate number of members but not less than 5 (five) members and will

include senior management of the bank along with CAMLCO & D-CAMLCO, if any. Among the

officials in the CCU, at least 2 (two) officials must be familiar with general banking and 1 (one)

with information technology of the bank.

• Adequate human resources and other logistic support shall be provided to CCU based on the size

and nature of the bank. The bank shall determine additional human resource in the CCU by

considering the number of branches, technology used, geographical presence and customer base.

• The CAMLCO, D-CAMLCO, if any, and members/employees of the CCU must have detailed

knowledge in the existing acts, rules and regulations, instructions issued by BFIU or Bangladesh

Bank from time to time and international standards on preventing ML, TF & PF.

• CCU shall be an independent division and shall be completely separated from internal compliance

and control Division (ICCD). Either the division shall perform same job but in different and

independent way. In this regard ICCD will also examine the performance of CCU and the bank’s

AML & CFT compliance program.

• To ensure this autonomy there shall not be any member from ICCD to CCU and vis-a-vis; but

there shall have to be enough co-ordination and co-operation in performing their responsibility

and information exchange.

• There shall not be any impediment to transfer the employee from ICCD to CCU and vis-à-vis but

no one shall be posted in these 2 (two) divisions at the same time.

3.10 Authorities & Responsibilities of CCU

a. Authorities:

For shouldering the following responsibilities senior management shall give the following

authorities to CCU:

� appointment of BAMLCO and assign their specific job responsibilities;



� requisition of human resources and logistic supports for CCU;

� make suggestion or administrative sanction for non-compliance by the employees.

b. Responsibilities:

CCU is the prime mover of the bank for ensuring the compliance of AML & CFT measures. Its main

responsibilities are to:

� The Unit will undertake organizational strategy and program regarding internal control

policies and procedures to prevent money laundering, terrorist financing & proliferation

financing activities and will ensure the coordination, implementation and review of the

same in the Bank.

� The Unit will evaluate overall monitoring process and observe changes of

rules/regulations and directives of BFIU and international standards that require

revision/up gradation and adaptation.

� The Unit will ensure maintenance of regular liaison with BFIU, Bangladesh Bank, External

& Internal Auditors and other Law enforcing agencies through CAMLCO/DCAMLCO.

� The Unit will ensure that the Bank’s AML & CFT policies and Risk Assessment & Risk

Management Guidelines under risk based approach are completed and updated.

� The Unit will monitor performance of the BAMLCO in the branch level to ensure

AML/CFT compliance.

� The Unit will monitor whether instruction circulars issued by it to the branches

regarding the procedure of transaction monitoring and internal control mechanism to

prevent Money Laundering and Terrorist financing are being followed.

� It will monitor whether correspondent relationships, trade based transactions,

remittance, technology related services and launching new products are maintained as

per instructions & guidelines provided by BFIU, Bangladesh Bank and CCU.

� The unit will oversee whether Money Laundering Prevention Act 2012 (as amended in

2015) Anti-Terrorist Act 2009 (as amended in 2012 & 2013) and other directives issued

by BFIU under these two acts are being properly followed by the overseas branches and

subsidiaries during rendering the activities and services.

� The unit will supervise whether due diligence are being rendered in case of accounts of

PEPs, IPs and Chief or Higher Management of any International Organization by

BAMLCO.

� It will oversee KYC, responsibilities of ordering, intermediary and beneficiary bank and

to update the list of agents in the website of our bank in case of Mobile Financial

Services.

� The unit will evaluate CTR to find out STR, SAR and if suspicious transaction is detected

then they will report it to BFIU, Bangladesh Bank and if not detected the CTR will be

reported to Bangladesh Bank on monthly basis. It will also evaluate the STR/SAR

received by it and forward the same to BFIU in time and in proper manner.

� It will conduct training courses, workshops and seminars for the development of



compliance knowledge amongst officials as and when required regarding Money

Laundering, Terrorist Financing and financing in spreading of trading of mass

destructive weapons.

� It will monitor/evaluate Independent Testing Procedure to be conducted at least half-

yearly by our ICCD.

� It will monitor/evaluate effectiveness of Self-Assessment procedure on half yearly

basis.

� The Unit will submit a report on the strategy undertaken, implementation status of the

same to the Managing Director & CEO on half yearly basis for onward submission with

specific recommendation to the Board of Directors.

� It will undertake required measures to submit any information, report and/or documents to

BFIU, Bangladesh Bank and/or any authority in respect of ML, TF & PF.

� It will oversee any other issue that may arise from time to time regarding ML, TF & PF.

3.11 Appointment & Qualification of CAMLCO

a. Appointment:

� The managing director & CEO shall appoint the CAMLCO at Head Office with sufficient

authority to implement and enforce corporate wide AML & CFT policies, procedures and

measures and who will report directly to CEO & MD and board of directors;

� The designated CAMLCO, directly or through the CCU, shall be the central point of contact

for communicating with the regulatory agencies regarding issues related to the bank's

AML&CFT program.

� As the CAMLCO is responsible for the oversight of all aspects of the bank’s AML & CFT

activities and is the focal point for all activity within the bank relating to ML & TF his/her

job description shall have to be clearly set out the extent of the responsibilities given to

him/her.

� Before assigning the CAMLCO to other duties of the bank, the management has to be sure

that the AML & CFT activities of the bank will not be hampered; and

� If the CAMLCO is changed, it must be informed to BFIU without delay.

b. Qualifications:

� His/her position shall be up to below 2 (two) step from the designation of ‘Managing

Director/Chief Executive Officer’ of the Bank.

� The position within the organization of the person appointed as CAMLCO will vary

according to the size of the bank and the nature of its business, but he or she shall have to

be sufficiently senior to command the necessary authority.

� He/she shall be a sufficiently senior person having the authority to implement and enforce

Anti-Money Laundering policies, procedures and measures and will report directly to Senior

Management/CEO and the Board of Directors.



� He/she will have vast knowledge in the existing acts, rules and regulations, instructions

issued by BFIU from time to time and international standards on preventing ML, TF & PF.

� He/she will also have vast knowledge & experience on general banking, investment and

foreign exchange business of the bank.

3.12 Authorities & Responsibilities of CAMLCO

a. Authorities:

CAMLCO must have sufficient authority to implement and enforce corporate wide AML policy,

procedure & measure and shall report directly to the MD & CEO and the Board of Directors. The

authorities must include at least the followings:

� CAMLCO shall exercise the authorities of the CCU as Head of the unit;

� CAMLCO shall be able to act on his own authority;

� He/she shall not take any permission or consultation from/with the MD & CEO before

submission of STR/SAR and any document or information to BFIU;

� He/she shall maintain the confidentiality of STR/SAR and any document or information

required by laws and instructions by BFIU;

� He/she have access to any information of the bank;

� He/she shall ensure his/her continuing competence;

� Depending on the scale and nature of the bank the designated CAMLCO may choose to

delegate duties or rely on suitably qualified staff for their practical performance whilst

remaining responsible and accountable for the operation of the designated functions.


The CAMLCO is responsible for overall oversight of the bank’s compliance with the regulatory

requirements on systems and controls against money laundering, terrorist financing and

proliferation financing. Few of the responsibilities are:

� CAMLCO must take all the responsibilities of CCU as Head of the unit;

� CAMLCO must ensure overall AML&CFT compliance of the bank;

� He/she shall oversee the submission of STR/SAR or any document or information to BFIU in

time;

� He/she shall maintain the day-to-day operation of the bank’s AML&CFT compliance;

� CAMLCO shall be liable to MD & CEO or Board of Directors for proper functioning of CCU;

� CAMLCO shall review and update ML & TF risk assessment & management of the bank;



� He/she shall ensure that corrective actions have taken by the bank to address the

deficiency identified by the BFIU or BB;

� He/she shall oversee all other issues that may arise from time to time regarding ML, TF & PF.

3.13 Appointment & Qualification of D-CAMLCO

a. Appointment:

� The managing director & CEO shall appoint the D-CAMLCO(s) at Head Office to implement

and enforce corporate wide AML & CFT policies, procedures and measures under

supervision of CAMLCO;

� The designated D-CAMLCO(s), through the CCU, shall be the central point of contact for

communicating with the regulatory agencies regarding issues related to the bank's

AML&CFT program after CAMLCO.

� As the D-CAMLCO is responsible for the oversight of all aspects of the bank’s AML & CFT

activities and is the focal point for all activity within the bank relating to ML & TF after

CAMLCO, his/her job description shall have to be clearly set out the extent of the

responsibilities given to him/her under supervision of CAMLCO.

� Before assigning the D-CAMLCO(s) to other duties of the bank, the management has to be

sure that the AML & CFT activities of the bank will not be hampered; and

� If the D-CAMLCO is changed, it must be informed to BFIU without delay, if required.

b. Qualifications:

� D-CAMLCO shall be at least in the rank of ‘Vice President’ of the bank.

� The position within the organization of the person appointed as D-CAMLCO will vary

according to the size of the bank and the nature of its business, but he or she shall have to

be sufficiently senior to command the necessary authority.

� He/she shall be a sufficiently senior person having the authority to implement and enforce

Anti-Money Laundering policies, procedures and measures and will report directly to

CAMLCO.

� He/she will have vast knowledge in the existing acts, rules and regulations, instructions

issued by BFIU from time to time and international standards on preventing ML, TF & PF.



3.14 Authorities & Responsibilities of D-CAMLCO

� The authorities & responsibilities of DCAMLCO shall be same as the authorities &

responsibilities of CAMLCO but he/she must discharge his/her authorities and

responsibilities under command, control & supervision of CAMLCO.

� Moreover, he/she will be act as Current Charge in absence of CAMLCO.



3.15 Appointment & Qualification of BAMLCO

a. Appointment:

� CAMLCO shall appoint the BAMLCO for each branch;

� Clear job descriptions and responsibilities of BAMLCO shall be mentioned in his/her

appointment letter.

b. Qualifications:

� The manager, the second man of the branch or a high official experienced in general

banking & investment in case of Non AD branches and a high official experienced in general

banking, investment & foreign exchange in case of AD branches shall be nominated as the

BAMLCO;

� The BAMLCO has to have detailed knowledge in the existing acts, rules and regulations,

BFIU’s instructions and bank’s own policies & guidelines on preventing Money Laundering,

Terrorist Financing & proliferation financing;



3.16 Authorities & Responsibilities of BAMLCO

a. Authorities:

BAMLCO shall arrange AML & CFT meeting with other concerned important officials of the

branch quarterly and shall take effective measures on the following matters after reviewing the

compliance of the existing acts, rules and regulations, BFIU’s instructions on preventing Money

Laundering & Terrorist Financing:

� Know Your Customer,

� Transaction monitoring,

� Identifying and reporting of Suspicious Transactions,

� Record keeping,

� Training.


For preventing ML, TF & PF in the branch, the BAMLCO shall perform the following

responsibilities:

� ensure that the KYC of all customers have done properly and for the new customer KYC is

being done properly;

� ensure that the UN Security Council and domestic sanction list checked properly before

opening of account and while making any international transaction;

� keep information of ‘dormant accounts’ and take proper measures so that any withdrawal

from these accounts shall not be allowed without compliance of BFIU's instruction;



� ensure regular transaction monitoring to find out any unusual transaction (In case of an

automated bank, the bank should follow a triggering system against transaction profile or

other suitable threshold. In case of a traditional bank, transaction should be examined at

the end of day against transaction profile or other suitable threshold. Records of all

transaction monitoring should be kept in the file);

� review cash transaction to find out any structuring;

� review of CTR to find out STR/SAR;

� ensure the checking of UN sanction list before making any foreign transaction;

� ensure that all the employees of the branch are well aware and capable to identify any

unusual transaction or any attempt of unusual transaction;

� compile self-assessment of the branch regularly and arrange quarterly meeting regularly;

� accumulate the training records of branch officials and take initiatives including reporting

to CCU, HR and training academy;

� ensure all the required information and document are submitted properly to CCU and any

freeze order or stop payment order are implemented properly;

� follow the media report on terrorism, terrorist financing or other offences, like corruption,

bribery, drug trafficking, gold smuggling, human trafficking, kidnapping or other predicate

offences and find out any relationship of the branch with the involved person; if so the

BAMLCO should make an STR/SAR;

� ensure that the branch is maintaining AML & CFT files properly and record keeping is done

as per the requirements of chapter 13 of this guidelines;

� ensure that corrective actions have taken by the branch to address the deficiency

identified by the BFIU or BB.

3.17 Roles & Responsibilities of Account Opening Officer/Operation Manager/Relationship Manager

� Perform due diligence on prospective clients prior opening an account;

� Be diligent regarding the identification(s) of account holder and the transactions relating

to the account;

� Ensure all required documentation is completed satisfactorily;

� Complete the KYC Profile for the new customer;

� Ongoing monitoring of customer‘s KYC profile and transaction activity;

� Obtain documentary evidence of large cash deposits;

� Escalate any suspicion to the Supervisor, Branch Manager and BAMLCO.

3.18 Roles & Responsibilities of ICCD

a. Internal Control and Compliance Division (ICCD) of the bank shall play an important role for

ensuring proper implementation of bank’s AML & CFT Compliance Program. Bank shall ensure



that ICCD is equipped with enough manpower and autonomy to look after the prevention of

ML, TF & PF.

b. The ICCD shall oversee the implementation of the AML & CFT compliance program of the bank

and has to review the 'Self Assessment Report' received from the branches and to execute the

'Independent Testing Procedure' appropriately.

c. ICCD shall be well resourced and enjoy a degree of independence within the bank. Those

performing the independent testing must be sufficiently qualified to ensure that their findings

and conclusions are reliable.

d. The internal audit must:

� understand ML & TF risk of the bank and check the adequacy of the mitigating measures;

� examine the overall integrity and effectiveness of the AML/CFT Compliance Program;

� examine the adequacy of Customer Due Diligence (CDD) policies, procedures and

processes, and whether they comply with internal requirements;

� determine personnel adherence to the bank’s AML & CFT Compliance Program;

� perform appropriate transaction testing with particular emphasis on high risk operations

(products, service, customers and geographic locations);

� assess the adequacy of the bank’s processes for identifying and reporting suspicious

activity;

� where an automated system is not used to identify or aggregate large transactions, the

audit should include a sample test check of tellers’ cash proof sheets;

� communicate the findings to the board and/or senior management in a timely manner;

� recommend corrective action to address the identified deficiencies;

� track previously identified deficiencies and ensures correction made by the concerned

person;

� examine that corrective actions have taken on deficiency identified by the BFIU or

Bangladesh Bank;

� assess training adequacy, including its comprehensiveness, accuracy of materials, training

schedule and attendance tracking;

� determine when assessing the training program and materials:

o the importance of the board and the senior management place on ongoing

education, training and compliance,

o employee accountability for ensuring AML & CFT compliance,

o comprehensiveness of training, in view of specific risks of individual business

lines,

o training of personnel from all applicable areas of the bank,



o frequency of training,

o coverage of bank policies, procedures, processes and new rules and regulations,

o coverage of different forms of money laundering and terrorist financing as they

relate to identifying suspicious activity,

o penalties for noncompliance and regulatory requirements.

3.19 External Auditor

a. External auditor shall also plays an important role in reviewing the adequacy of AML & CFT

controls by communicating their findings and recommendations to management via the

annual management letter, which accompanies the audit report.

b. External auditor shall be risk-focus while developing their audit programs and conducts

intensive reviews of higher risk areas where controls may be deficient.

c. External auditors shall report incidences of suspected criminal activity uncovered during

audits in its audit report.



CHAPTER 04

Customer Acceptance Policy

4.1 Objectives

EXIM Bank has developed this customer acceptance policy with a view to:

a. manage any risk that the services provided by the Bank may be exposed to;

b. prevent the Bank from being used, intentionally or unintentionally, for ML/TF purposes;

c. ensure the Shariah compliance; and

d. identify customers who are likely to pose a higher than average risk.

4.2 Who are Customers for AML & CFT?

For the purposes of these guidelines, a customer includes:

a. the person or entity that maintains an account with the bank or having any business

relationship with the bank or those on whose behalf an account is maintained (i.e. beneficial

owners);

b. the beneficiaries of transactions conducted by professional intermediaries; and

c. any person or entity connected with high value single transaction of demand draft, pay order

and wire transfer or a financial transaction who can pose a significant reputational or other

risk to the bank. High value transaction is one which appears to be unusual in contrast with

the normal transaction pattern.

4.3 Customer Acceptance Policy

4.3.1 General Requirements

Branch, Authorized Subsidiaries and/or concerned Division of Head Office shall ensure the

following aspects while establishing relationship with a customer or providing any banking

services or conducting transactions:

a. No account shall be opened or operated by violation of AML/CFT laws and rules;

b. No account or business relationship shall be opened or operated that does not permit by

shariah compliance (e.g. Casino, Bar, Tobacco Business etc.);

c. No account is opened in anonymous or fictitious or account only with numbers;

d. No online account can be opened without physical presence of the customer;

e. Customers are to be categorized into low & high risks ones for identified risks in terms of

the nature of business activity, location of the customer and his clients, mode of payments,

volume of turnover, social and financial status, etc;

f. For the purpose of risk categorization, individuals (other than High Net Worth) and entities

whose identities and sources of wealth can be easily identified and transactions in whose

accounts by and large conform to the known profile, may be categorized as low risk.

Illustrative examples of low risk customers could be salaried employees whose salary

structures are well defined, people belonging to lower economic strata of the society

whose accounts show small balances and low turnover, Government Departments and



Government owned companies, regulators and statutory bodies etc. In such cases, only

the basic requirements of CDD are to be met.

g. In view of the risks involved in cash intensive businesses, accounts of bullion dealers

(including sub-dealers) & jewelers shall also be categorized as 'high risk' requiring enhanced

due diligence. Other examples of customers requiring higher due diligence include:

i. nonresident customers;

ii. high net worth individuals;

iii. trusts, charities, NGOs and religious organizations receiving donations;

iv. companies having close family shareholding or beneficial ownership;

v. firms with 'sleeping partners';

vi. politically exposed persons (PEPs) of foreign origin, customers who are close

relatives of PEPs and accounts of which a PEP is the ultimate beneficial owner;

vii. influential persons (IPs), customers who are close relatives of IPs and accounts of

which a IP is the ultimate beneficial owner;

viii. chief executive or top level officials of any international organization, customers who

are close relatives of chief executive or top level officials of any international

organization and accounts of which a chief executive or top level officials of any

international organization is the ultimate beneficial owner;

ix. non-face to face customers; and

x. those with dubious reputation as per public information available etc.

h. apply enhanced due diligence while establishing and maintaining business relationship and

conducting transaction with a person (including legal representative, financial institution or

any other institution) of the countries and territories that do not meet international

standard in combating money laundering and terrorism financing (such as the countries

and territories enlisted as High–Risk and Non-Cooperative Jurisdictions in the Financial

Action Task Force’s Public Statement).

i. In addition to what has been indicated above, it is required to take steps to identify and

assess their ML/TF risk for customers, products & services, transactions, delivery channels,

countries and geographical areas; and effectively manage and mitigate their risk adopting a

risk-based approach as indicated in these guidelines. As a corollary, it is also required to

adopt enhanced measures for products, services and customers with a high risk rating.

j. In this regard, further guidance can be taken from MLPA-2012, ATA-2009 & BFIU Master

Circular no.10 dated 28-12-2014 & other Directives of BFIU from time to time. A risk

register (annexure A) is added with these guidelines for guidance & meticulous compliance.

k. Unique customer identification code for any customer who maintains more than one

account or availing more than one facilities shall be used. Such unique identification system

shall facilitate banks to avoid redundancy, and saves time and resources. This mechanism

also enables banks to monitor customer transactions effectively.

l. Documentation requirements and other information to be collected in respect of different

categories of customers depending on perceived risk and keeping in mind the requirements

of MLPA-2012, ATA-2009 & BFIU Directives from time to time;

m. Not to open an account or allow withdrawal of money or close an existing account where

the bank is unable to apply appropriate customer due diligence measures, i.e., bank is

unable to verify the identity and /or obtain documents required as per the risk

categorization due to non cooperation of the customer or non reliability of the



data/information furnished to the branch. However Branch should be careful to avoid

harassment of customers.

n. Decision by a branch to close an account should be taken at the Head Office level after

giving due notice to the customer explaining the reasons for such a decision.

o. Circumstances, in which a customer is permitted to act on behalf of another person/entity

or when an account is operated by a mandate holder or where an account is opened by an

intermediary in fiduciary capacity, must be in conformity with the established law and

practice of banking and appropriate EDD to be applied;

p. No banking relationship shall be established or transaction to be made with a Shell Bank

and/or any bank that provides services to shell bank;

q. No account and/or banking relationship shall be opened or established in the name of any

person or entity or country listed under United Nations Security Council Resolutions

(UNSCRs) or their close alliance adopted under Chapter VII of the Carter of UN on suspicion

of involvement in terrorist or terrorist financing activities and proscribed or enlisted by

Bangladesh Government shall be opened or operated.

r. Accounts for the non-resident Bangladesh citizens are to be opened subject to compliance

of Foreign Exchange Regulation Act, 1947 and circulars issued by Bangladesh Bank under it.

s. It is important to bear in mind that the implementation of this customer acceptance policy

must not result in denial of banking services to general public, especially to those, who are

financially or socially disadvantaged.

4.3.2 Specific Requirements

4.3.2.1 Individual Account

Branch, Authorized Subsidiary and/or concerned Head Office Division may open account or

establish relationship with any natural person or individual ensuring the followings:

a. The individual is a Bangladeshi national who is capable of making contract as per contract

Act;

b. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU

& this guidelines are done including completion of KYC, TP & other documentations, risk

grading and performing appropriate CDD measures;

c. AML/CFT measures are also applied to beneficiary owner(s) and authorized person(s), if

any; and

d. Names of the customer, beneficiary owner(s) and authorized person(s), if any, are not

listed in Targeted Financial Sanctions (TFS) related to TF & PF.

4.3.2.2 Minor


establish relationship with any minor ensuring the followings:

a. The account is opened and operated by the natural or legal guardian of the minor on behalf

of him/her;



b. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU



c. Physical presence of Guardian is required for withdrawal of money;

d. AML/CFT measures are also applied to beneficiary owner(s) and authorized person(s), if

any; and

e. Names of the customer, beneficiary owner(s) and authorized person(s), if any, are not


4.3.2.3 Illiterate Person


establish relationship with any illiterate person ensuring the followings:

a. The illiterate person is capable of making contract as per contract Act;

b. The illiterate person is Bangladeshi national & the account is opened and operated by

him/her following standard norms & practices of the Bank;

c. Thumb impression & photograph attestation are done as per standard banking practice;

d. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU



e. Physical presence of the illiterate person is required for withdrawal of money;

f. AML/CFT measures are also applied to beneficiary owner(s) and authorized person(s), if

any; and

g. Names of the customer, beneficiary owner(s) and authorized person(s), if any, are not


4.3.2.4 Non Resident Bangladeshi & Foreign National


establish relationship with any Non Residential Bangladeshi or Foreign National ensuring the

followings:

a. The account is opened & operated in accordance with the sections of Foreign Exchange

Regulation Act, 1947 and circulars & guidelines issued by Bangladesh Bank under it;

b. The Non Resident Bangladeshi or Foreign National is capable of making contract as per

contract Act;

c. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU




any; and





4.3.2.5 Married Woman or Housewife


establish banking relationship with any Married Women or Housewife ensuring the followings:

a. The Married Women or Housewife is capable of making contract as per contract Act;

b. Sources of Fund & wealth of the Married Women or Housewife is duly identified and

verified;


& this guidelines are done including completion of KYC, TP & other documentations and

performing appropriate EDD measures categorizing the account as high risk in addition to

applying normal CDD;

d. AML/CFT measures are also applied to husband of the married woman or housewife,

beneficiary owner(s) and authorized person(s), if any; and

e. Names of the customer, husband of the married woman or housewife, beneficiary owner(s)

and authorized person(s), if any, are not listed in Targeted Financial Sanctions (TFS) related

to TF & PF.

4.3.2.6 Pardansheen Women


establish banking relationship with any Pardansheen Women ensuring the followings:

a. Physical presence of the Pardansheen Women is required at the time of opening of

account;

b. Account is opened or relationship is established by the Pardansheen Women at her free-

will and full understanding of the terms and conditions of the bank;

c. Her photograph is to be attested by responsible female officer who will confirm her

genuineness of photo identification;

d. She is to be capable of making contract as per contract Act;

e. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU




any; and



4.3.2.7 Blind Man/Woman


establish relationship with any Blind Man/Woman ensuring the followings:

a. Physical presence of the Blind Man/Woman is required at the time of opening of account;

b. He/She is to be capable of making contract as per contract Act;






d. KYC, TP, CDD and other AML & CFT requirements are also applicable to the assistant of the

blind man/woman;

e. Physical presence of the both blind man/woman and his/her assistant are required at the

time of withdrawal of money;


any; and



4.3.2.8 Joint Accounts

Branch, Authorized Subsidiary and/or concerned Head Office Division may open an account

jointly or establish relationship with two or more natural persons or individuals ensuring the

followings:

a. The individuals are of Bangladeshi nationals who are capable of making contract as per

contract Act;

b. It is required to obtain clear instruction in writing, signed by all account holders, regarding

the operation of the account;


& this guidelines are done on all individuals including completion of KYC, TP & other

documentations, risk grading and performing appropriate CDD measures;


any; and



4.3.2.9 Politically Exposed Persons (PEPs)

Branch, Authorized Subsidiary and/or concerned Head Office Division is required to determine

whether the customer or the beneficial owner is a politically exposed person (PEP) through

software called Accuity Online Compliance Solution. Once PEP is identified, account may be

opened or relationship may be established for/with him/her ensuring the followings:


Regulation Act, 1947 and circulars & guidelines issued by Bangladesh Bank under it;

b. The Politically Exposed Person (PEP) is capable of making contract as per contract Act;

c. Head Office approval is required to open such account;





e. AML/CFT measures are also applied to beneficiary owner(s) and authorized person(s), if

any; and

f. Names of the customer, beneficiary owner(s) and authorized person(s), if any, are not




4.3.2.10 Influential Persons (IPs)

Branch, Authorized Subsidiary and/or concerned Head Office Division is required to determine

whether the customer or the beneficial owner is a Influential Person (IP) through software called

Accuity Online Compliance Solution. Once IP is identified, account may be opened or

relationship may be established for/with him/her ensuring the followings:


Regulation Act, 1947 and circulars & guidelines issued by Bangladesh Bank under it, if

applicable;

b. The Influential Person (IP) is capable of making contract as per contract Act;







any; and



4.3.2.11 Chief Executive of any International Organization or any top level official


establish relationship with any Chief Executive of any International Organization or any top level

official (whether as customer or beneficiary owner) ensuring the followings:


Regulation Act, 1947 and circulars & guidelines issued by Bangladesh Bank under it, if

applicable;

b. The Chief Executive of any International Organization or any top level official is capable of

making contract as per contract Act;







any; and



4.3.2.12 Legal Persons/ Organizations


establish relationship with any Legal Person/Organization such as proprietorship concern,

partnership firm, private limited company, public limited company, etc. ensuring the followings:



a. The legal Person/organization has a legal form, registered name, registered office address

and/or principal place of business, and is doing shariah compliant lawful business;

b. Nature of business, ownership control and control structure of the organization are clearly

known;

c. Powers & authorities to open and operate an account with the bank are lawfully specified;




e. AML/CFT measures are also applied to owner(s)/directors, beneficiary owner(s) and

authorized person(s), if any; and

f. Names of the customer, owner(s)/directors, beneficiary owner(s) and authorized person(s),

if any, are not listed in Targeted Financial Sanctions (TFS) related to TF & PF.

4.3.2.13 Legal Arrangement such as NGO/Trust/Club/Charity/Social Association


establish relationship with any Legal arrangement such as NGO or Trust or Club or Charity or

Social Association or any other such form ensuring the followings:

a. The legal arrangement has a legal form, registered or unregistered name, registered or

unregistered office address and/or principal place of business, and is doing shariah

compliant lawful business or activities;

b. Nature of business or activities, ownership control and control structure of the organization

are clearly known;

c. Powers & authorities to open and operate an account with the bank are lawfully specified;





e. AML/CFT measures are also applied to settler, the trustee(s), protector (if any), office

bearers (if any), beneficiary owner(s) and authorized person(s), if any;

f. Names of the customer, settler, the trustee(s), protector (if any), office bearers (if any),

beneficiary owner (s) and authorized person(s), if any, are not listed in Targeted Financial

Sanctions (TFS) related to TF & PF; and

g. It is also to be confirmed that such organizations are not exploited by or actively support

terrorists or terrorist organizations.

4.3.2.14 Walk-in Customers

Branch, Authorized Subsidiary and/or concerned Head Office Division may provide certain

banking services such as issuing DD/PO or serving for TT/MT, cash deposits, cash withdrawal,

payment of inward foreign remittances, etc. to a walk-in customer, i.e., a customer without

having bank account ensuring the followings:

a. Complete and correct information of the Walk-in customer are collected while serving

him/her;



b. Sources of fund and motive of transaction while issuing DD/PO or serving for TT/MT as

ascertained before delivering services;

c. Complete and correct information of any person other than customer who deposits or

withdraws funds using on-line facilities are duly collected;

d. Additionally, in regards to on-line deposit, it is also required to identify the sources of

funds as well.

4.3.2.15 Non Face to Face Customers

‘Non face to face customer’ refers to “the customer who opens and operates his account by

agent of the bank or by his own professional representative without having physical presence at

the bank branch”. Branch, Authorized Subsidiary and/or concerned Head Office Division may

open account or establish relationship with non face to face customers ensuring the followings:

a. Non face to face customer is capable of making contract as per contract Act;

b. Head Office approval is obtained to open such account;

c. Sources of Fund & wealth of the non face to face customer are duly identified and verified;

d. Business address & residential address of such customers are physically verified;

e. Required compliances of AML/CFT laws, BFIU circulars & directives, and instructions of CCU




f. AML/CFT measures are also applied to beneficiary owner(s) and authorized person(s) or

mandate; and

g. Names of the DNFBPs, their customers, beneficiary owner(s) and authorized person(s), if

any, are not listed in Targeted Financial Sanctions (TFS) related to TF & PF.

4.3.2.16 Correspondent Banking

Branch, Authorized Subsidiary and/or concerned Head Office Division may establish relationship

with cross-border correspondent bank or financial institutions ensuring the followings:

a. Normal due diligence measures on respondent institutions, owners/directors, beneficiary

owner(s), authorized person(s), if any is duly performed;

b. Sufficient information about a respondent institution is gathered to understand fully the

nature of the respondent’s business and to determine from publicly available information

the reputation of the institution and the quality of supervision, including whether it has

been subject to a money laundering or terrorist financing investigation or regulatory action;

c. The respondent institution’s AML/CFT controls is assessed duly;

d. Approval from Head Office management is obtained before establishing new

correspondent relationships;

e. The respective responsibilities of each institution is clearly understood;

f. With respect to “payable -through accounts”, be satisfied that the respondent bank has

conducted CDD on the customers having direct access to accounts of the correspondent

bank, and that it is able to provide relevant CDD information upon request to the

correspondent bank;

g. Names of the respondent institution, owner(s)/directors, beneficiary owner(s) and

authorized person(s), if any, are not listed in Targeted Financial Sanctions (TFS) related to

TF & PF.



h. It is prohibited from entering into, or continuing, a correspondent banking relationship with

shell banks; and

i. It is also required to be confirmed that respondent institutions do not permit their accounts

to be used by shell banks.

4.3.2.17 Money or Value Transfer Services (MVTS)

Branch, Authorized Subsidiary and/or concerned Head Office Division may establish relationship

with cross-border or local money/value transfer service (MVTS) providers and/or agents and/or

sub-agents for providing MTVS ensuring the followings:

a. Normal due diligence measures on cross-border or local money/value transfer service

(MVTS) providers and/or agents and/or sub-agents, owner(s)/director(s) and beneficiary

owner(s) is performed duly;

b. Natural or legal persons that provide money or value transfer services (MVTS) are licensed

or registered, and subject to effective systems for monitoring and ensuring compliance

with the relevant measures called for in the FATF Recommendations & BFIU directives;

c. Any natural or legal person working as an agent or sub-agent is also licensed or registered

by a competent authority, or the MVTS provider is maintaining a current list of its agents or

sub-agents accessible by competent authorities in the countries in which the MVTS

provider and its agents or sub-agents operate;

d. Sufficient information about the MVTS providers and/or agents and/or sub-agents is

gathered to understand fully the nature of the their business and to determine from

publicly available information the reputation of them and the quality of supervision,

including whether it has been subject to a money laundering or terrorist financing

investigation or regulatory action;

e. The MVTS providers and/or agents and/or sub-agents’ AML/CFT controls is assessed duly;

f. Approval from Head Office management is obtained before establishing relationship with

cross-border or local money/value transfer service (MVTS) providers and/or agents and/or

sub-agents for providing MTVS;

g. When processing MVTS, it is required to take appropriate action and prohibit conducting

transactions with designated persons and entities as per the obligations set out in the

relevant United Nations Security Council resolutions & OFAC sanctions, relating to the

prevention and suppression of terrorism and terrorist financing.

4.3.2.18 New Technologies

Branch, Authorized Subsidiary and/or concerned Head Office Division is required to identify and

assess the money laundering or terrorist financing risks that may arise in relation to:

a. The development of new products and new business practices, including new delivery

mechanisms; b. The existing products or services and delivery mechanisms; c. The use of new or developing technologies for both new and pre-existing products; d. Such a risk assessment is to be taken place prior to the launch of the new products,

business practices or the use of new or developing technologies; and e. It is required to take appropriate measures to manage and mitigate those risks.

4.3.2.19 Wire Transfers

Branch, Authorized Subsidiary and/or concerned Head Office Division may execute any wire

transfer ensuring the followings:



a. Required and accurate originator information, and required beneficiary information, on

wire transfers and related messages is maintained , and that the information remains with

the wire transfer or related message throughout the payment chain;

b. Wire transfers for the purpose of detecting those which lack required originator and/or

beneficiary information are monitored, and appropriate measures are taken;

c. When processing wire transfers, it is required to take appropriate action and prohibit

conducting transactions with designated persons and entities as per the obligations set out

in the relevant United Nations Security Council resolutions & OFAC sanctions, relating to

the prevention and suppression of terrorism and terrorist financing.

4.3.2.20 Designated Non-Financial Businesses and Professions (DNFBPs)


establish relationship with Designated Non-financial Businesses and Professions (DNFBPs) such as

real estate agents, dealers in precious metals and dealers in precious stones, lawyers, notaries,

accountants, Trust and company service providers, etc. who prepare for or carry out transactions

for their clients ensuring the followings:

a. Designated Non-financial Businesses and Professions (DNFBPs) are capable of making

contract as per contract Act;

b. Head Office approval is obtained to open such account;





d. AML/CFT measures are also applied to customers of DNFBPs, beneficiary owner(s) and

authorized person(s), if any; and

e. Names of the DNFBPs, their customers, beneficiary owner(s) and authorized person(s), if

any, are not listed in Targeted Financial Sanctions (TFS) related to TF & PF.



CHAPTER 05

Customer Due Diligence

5.1 KYC Policy & Procedures

5.1.1 Standard KYC Information

a. KYC procedures refer to knowing a customer physically and financially. This means to conduct

an effective KYC, it is essential to accumulate complete and accurate information about the

prospective customer. Complete refers to combination of all information for verifying the

identity of the person or entity and accurate refers to such complete information that has

been verified for accuracy.

b. Branches or authorized subsidiaries or concerned Head Office Divisions are required to

collect complete & accurate KYC information of the customer before or during establishing

business relationship or carrying out any occasional transaction as per bank’s account

opening form and/or any other applicable printed forms duly approved by the Bank and/or

KYC forms.

c. Branches or authorized subsidiaries or concerned Head Office Divisions may collect additional

information about the KYC & the purpose and intended nature of the business relationship in

addition to paragraph 5.1.1(b) up to their satisfaction which are required to conduct

appropriate due diligence considering the risk of the customer in the light of existing

directions.

d. Branches or authorized subsidiaries or concerned Head Office Divisions are required to

comply the requirements of customer acceptance policy as specified in the paragraphs 4.3.1

to 4.3.2.20 of chapter three of this Guidelines.

5.2 What is Required for CDD?

Branches or authorized subsidiaries or concerned Head Office Divisions are required to:

a. identify the customer and verify that customer’s identity using reliable, independent source

documents, data or information, i.e., complete & accurate information of the customer;

b. verify that any person purporting to act on behalf of the customer is so authorized, and

identify and verify the identity of that person i.e. complete & accurate information of the

authorized person(s);

c. identify the beneficial owner and take reasonable measures to verify the identity of the

beneficial owner, using the relevant information or data obtained from a reliable source,

such that the branch or authorized subsidiary or concerned Head Office Division is satisfied

that it knows who the beneficial owner is. It includes collection & preservation of:

i. complete & accurate information of the person(s) on whose behalf the customer

operates the account;

ii. complete & accurate information of the person(s) who control(s) the customer; and



iii. in case of company, complete & accurate information of the shareholder who

controls the company or has 20% or more shares of the company;

d. understand and, where relevant, obtain information on, the purpose and intended nature of

the business relationship.

5.3 When CDD is Required (Timing of CDD)?

Branches or authorized subsidiaries or concerned Head Office Divisions are required to conduct

CDD on the customer and the person conducting the transaction, when:

a. establishing business relationships including opening accounts;

b. providing wire transfer (remittance) services;

c. providing money or value transfer (remittance) services;

d. providing trade finance and trade service facilities;

e. while selling bank’s own products, issuing credit cards, payment of dues of credit cards and

reloading of prepaid/travel cards and any other product;

f. carrying out occasional transactions;

g. it has any suspicion of ML/TF, regardless of amount; or

h. it has any doubt about the veracity or adequacy of previously obtained information.

5.4 Risk Grading and Applicable CDD

a. Branch or authorized subsidiary of concerned Head Office Division shall review the KYC &

other information they have collected (paragraph 5.1.1) for each new customer, assess &

evaluate the risk of the customer and categorize them into two groups: high risk customers &

low risk customers.

b. The nature and extent of due diligence will depend on the risk perceived by the branch or

authorized subsidiary or concerned Head Office Division. However, while preparing

customer’s risk category branch or authorized subsidiary of concerned Head Office Division

should take care to seek only such information from the customer, which is relevant to the

risk category and is not intrusive.

c. For the purpose of risk categorization, branch or authorized subsidiary of concerned Head

Office Division shall follow the instructions as specified in the paragraphs 4.3.1(e) – 4.3.1(j) of

chapter three of this Guidelines.

d. Branch or authorized subsidiary of concerned Head Office Division shall apply normal due

diligence measures in case of individuals or legal entities or legal arrangements scored with

low risk.

e. Branch or authorized subsidiary of concerned Head Office Division shall apply enhanced due

diligence in case of individuals or legal entities or legal arrangements scored with high risk.

f. Branch or authorized subsidiary of concerned Head Office Division shall also apply enhanced

due diligence in case of Transactions identified with unusual in regards to its pattern, volume

and complexity which have no apparent economic or lawful purposes.



5.5 Ongoing CDD Measures (Review and Update)

a. Branch or authorized subsidiary of concerned Head Office Division shall take necessary

measures to review and update the KYC of the low risk customers in every two years & high

risk customers in every year.

b. Branch or authorized subsidiary of concerned Head Office Division shall update the changes

in any information on the KYC as soon as they get to be informed. Moreover, they should

update KYC information anytime if there is any particular necessity realized.

c. Depending on the updated information, the risks associated with these accounts shall have

to be assessed again without any delay.

d. Any subsequent change to the customer’s name, address, or employment details of which

the branch or authorized subsidiary of concerned Head Office Division becomes aware shall

be recorded as part of the CDD process.

e. Branch or authorized subsidiary of concerned Head Office Division shall also collect the

announcement of customer about the Transaction Profile of customer account in the

specified form .

f. Reviewing the nature of the customer, the source of money in the account and the nature of

transactions within 6 (six) months of establishing business relation and assessing the

effectiveness with a logical consideration, branch or authorized subsidiary of concerned Head

Office Division shall again collect the Transaction Profile along with the amendments in it

from the customer.

5.6 Enhanced CDD measures

a. Branches or authorized subsidiaries of concerned Head Office Divisions are required to apply

enhanced due diligence measures where required as identified in the paragraph 5.4 or in any

high risk scenario in addition to performing normal CDD measures as indicated in the

paragraph 5.2 of this guidelines .

b. Enhanced CDD measures includes:

� Obtaining additional information on the customer (occupation, volume of assets,

information available through public databases, internet, etc) and updating more

regularly the identification data of customer and beneficial owner.

� Obtaining additional information on the intended nature of the business relationship.

� Obtaining information on the source of funds or source of wealth of the customer.

� Obtaining information on the reasons for intended or performed transactions.

� Obtaining the approval of senior management of Head Office to commence or

continue the business relationship.

� Conducting regular monitoring of the business relationship, by increasing the number

and timing of controls applied and selecting patterns of transactions that need

further examination.

� Making aware the concerned officials about the risk level of the customer.



5.7 CDD Measures & Beneficiary Owners

a. Branches or authorized subsidiaries of concerned Head Office Divisions shall apply CDD

obligations including collection & preservation of complete and accurate information for the

beneficial owners of the accounts in addition to the account holder before or during the course

of establishing a business relationship or conducting occasional transactions.

b. In doing so, branches or authorized subsidiaries of concerned Head Office Divisions shall put in

place appropriate measures to indentify beneficial owner.

c. Branches or authorized subsidiaries of concerned Head Office Divisions, upon its own

satisfaction ensure CDD of beneficial ownership by collecting information and documents from

independent and reliable sources that may include publicly available information, information

from customer or information from other reliable sources.

d. Branches or authorized subsidiaries of concerned Head Office Divisions shall consider following

aspects while identifying beneficial ownership:

i. Any natural person operating accounts on behalf of customer;

ii. Any person (whether acting alone or together) who has controlling interest or

ownership interest on a customer who might be legal entity or legal arrangements.

Where there is any doubt about identifying controlling interest, the branches or

authorized subsidiaries of concerned Head Office Divisions shall consider other means

to determine controlling interest or ownership of a legal entity or arrangements. In

addition to that they will also consider reasonable measures to verify the identity of

the relevant natural person who hold senior management position;

iii. Any person or entity who has controlling or 20% or above share holding within any

legal entity.

iv. The settler(s), trustee(s), the protector, the beneficiaries or class of beneficiaries, or

any other natural person who exercises control over the trust.

v. Any person in equivalent or similar position for trust (as mentioned above) shall

consider for other types of legal arrangements.

e. Where, a natural or legal persons who holds controlling interest, listed on a stock exchange and

subjects to disclosure requirements or majority owned subsidiaries of such listed companies

may be exempted from identifying or verifying beneficial ownership requirements.

5.8 Specific CDD Measures

5.8.1 Individual Customer

5.8.1.1 Identify & Verify the Customer

a. Collect complete & accurate KYC & other information as per paragraph 5.1.1.

b. Collect identification documents such as:

i. National ID Card; or

ii. Valid Passport; or

iii. Valid Driving License; or

iv. Employer provided ID Card, bearing the photograph and signature of the applicant.



Identification documents bear with valid and current photographs, signatures, or are

easy to obtain, are normally not appropriate as evidence of identity, but birth certificate,

certificate from City Corporation, Union Parishod, etc. may be considered as documents

for identity also. Any photocopies of documents showing photographs and signatures

should be clearly understandable.

c. One or more of the following steps is recommended to verify the customer’s identity &

addresses. The information obtained should demonstrate that a person of that name exists at

the address given and that the applicant is that person.

i. check the national ID with Election Commission database;

ii. provision of a recent utility bill, tax assessment or Bank statement containing details of

the address (to guard against forged copies it is strongly recommended that original

documents are examined);

iii. checking the telephone directory;

iv. visiting home/office;

v. sending Thanks Letter to account holder and Introducer.

5.8.1.2 Identify & Verify the Authorized Person(s), if any

Collect the complete information & the required identification documents of the authorized

person(s), and verify the same as recommended in the paragraph 5.8.1.1(a)(b)(c).

5.8.1.3 Identify & Verify the Beneficiary Owner(s), if any

Collect the complete information & the required identification documents of the beneficiary

owner(s), and verify the same as recommended in the paragraph 5.8.1.1(a)(b)(c).

5.8.2 NRB (Non-Resident Bangladeshi)


a. Collect complete & accurate KYC & other information as per paragraph 5.1.1.


i. National ID Card, if any; or

ii. Valid Passport with VISA ; or

iii. Valid Driving License; or

iv. Employer provided ID Card, bearing the photograph and signature of the applicant;

or

v. Social security card; or

vi. Work permit/employer’s certificate; or

vii. Any other documents evidencing going abroad.


addresses. The information obtained should demonstrate that a person of that name exists at

the address given and that the applicant is that person.

i. check the national ID with Election Commission database;

ii. enquiring Bangladesh embassy in the country of resident;

iii. checking the telephone directory in Bangladesh, if any;

iv. visiting home/office in Bangladesh, if any;



v. sending Thanks Letter to account holder and Introducer; or

vi. any other genuine or authentic sources.







5.8.3 Joint Customer

5.8.3.1 Identify & Verify the Joint Customers

Collect the complete information & the required identification documents of the each individual

person, and verify the same as recommended in the paragraph 5.8.1.1(a)(b)(c).







5.8.4 Sole Proprietorship Concern


a. Collect complete & accurate KYC and other information as per paragraph 5.1.1.


i. Up-to-date trade licence;

ii. TIN certificate;

iii. VAT Registration;

iv. Membership certificate of any association, if any; and

v. Any other related documents up to the satisfaction of the branch, authorized and

concerned Head Office Divisions.


addresses. The information obtained should demonstrate that a person or entity of that

name exists at the address given and that the applicant is that person or entity.

d. check the trade licence with city corporation or issuing authority;



e. collect a recent utility bill, tax assessment or other’s bank statement containing details of the

address (to guard against forged copies it is strongly recommended that original documents

are examined);

f. checking the telephone directory;

g. visiting home/office;

h. sending Thanks Letter to account holder and Introducer; or

i. any other genuine or authentic sources.







5.8.5 Partnership Concern




i. Up-to-date trade licence;

ii. Partnership deed/partnership letter;

iii. Registered partnership deed, if registered;

iv. Resolution of the Partners, specifying the operational guidelines/instructions of the

partnership account;

v. TIN certificate;

vi. VAT Registration;

vii. Membership certificate of any association, if any; and

viii. Any other related documents up to the satisfaction of the branch, authorized and



addresses. The information obtained should demonstrate that a person or entity of that name

exists at the address given and that the applicant is that person or entity.

i. check the trade licence with city corporation or issuing authority;

ii. collect a recent utility bill, tax assessment or other’s bank statement containing

details of the address (to guard against forged copies it is strongly recommended that

original documents are examined);


iv. visiting home/office;





5.8.5.2 Identify & Verify the Partners

Collect the complete information & the required identification documents of each partner,

and verify the same as recommended in the paragraph 5.8.1.1(a)(b)(c).




5.8.5.4 Identify & Verify the Power of Attorney Holder, if any

Collect the complete information & the required identification documents of the power of

attorney holder(s), and verify the same as recommended in the paragraph 5.8.1.1(a)(b)(c).

5.8.5.5 identify & Verify the Beneficiary Owner(s), if any



5.8.6 Private Limited Companies




i. Valid & up-to-date trade licence;

ii. Certified copy of Memorandum of association;

iii. Certified copy of articles of association;

iv. Certified copy of Certificate of incorporation;

v. List of directors;

vi. Resolution of the board of directors to open an account and identification of those who

have authority to operate the account;

vii. TIN certificate;

viii. VAT Registration;

ix. Membership certificate of any association, if any; and

x. Any other related documents up to the satisfaction of the branch, authorized and






ii. check the information of company and it’s directors with Register of Joint Stock

Companies and Farms;



iii. collect a recent utility bill, tax assessment or other’s bank statement containing details

of the address (to guard against forged copies it is strongly recommended that original

documents are examined);

iv. checking the telephone directory;

v. visiting office;

vi. sending Thanks Letter to account holder and Introducer;

vii. any other genuine or authentic sources.

5.8.6.2 Identify & Verify the Directors

Collect the complete information & the required identification documents of each director,











5.8.7 Public Limited Companies



b. Collect identification documents such as

i. Valid & up-to-date trade licence;

ii. Certified copy of Memorandum of association;

iii. Certified copy of articles of association;

iv. Certified copy of Certificate of incorporation;

v. Certificate of commencement;

vi. List of directors;

vii. Resolution of the board of directors to open an account and identification of those

who have authority to operate the account;

viii. TIN certificate;

ix. VAT Registration;

x. Membership certificate of any association, if any; and

xi. Any other related documents up to the satisfaction of the branch, authorized and








ii. check the information of company and it’s directors with Register of Joint Stock

Companies and Farms;

iii. collect a recent utility bill, tax assessment or other’s bank statement containing

details of the address (to guard against forged copies it is strongly recommended that

original documents are examined);

iv. checking the telephone directory;

v. visiting office;

vi. sending Thanks Letter to account holder and Introducer; or

vii. any other genuine or authentic sources.

5.8.7.2 Identify & Verify the Directors

Collect the complete information & the required identification documents of each director,











5.8.8 Accounts of Societies, Associations, NGOs, Clubs, Trust and other similar organizations




i. Certificate of Registration, if registered,

ii. Bye laws/ Trust deed

iii. List of Managing Committee Members and their bio-data

iv. Resolution of the Managing Committee of the Organization/trust for opening of the

account and delegating powers to operate the accounts of the organization.

v. Any other related documents up to the satisfaction of the branch, authorized and







i. check the trade registration with issuing authority;

ii. collect a recent utility bill in the name of the organization or other’s bank

statement containing details of the address (to guard against forged copies it is

strongly recommended that original documents are examined);


iv. visiting office;









5.8.9 Verification of Fund

a. Branches or authorized subsidiaries or concerned Head Office Divisions are required to

ensure the collection and verification of the documents supporting source of fund of the

person or entity at the time of establishing any business relationship or while conducting

CDD.

b. The document related source of fund of a person or entity may include:

i. present employment identity;

ii. salary certificate/copy/advice;

iii. pension book;

iv. financial statement;

v. income tax return;

vi. business document or any other document that could satisfy the branch or

authorized subsidiary or concerned Head Office Division.

c. The branch or authorized subsidiary or concerned Head Office Division shall request the

person or entity to produce e-TIN (Electronic Tax Identification No.) certificate which declares

taxable income.

5.8.10 Exception When Opening a Bank Account (Opening Account without Verification)

The branch or authorized subsidiary or concerned Head Office Division may verify the documents

of account holder after opening the account, provided that there are adequate safeguards in

place to ensure that, before verification has been completed:



i. the account is not closed; and

ii. transaction is not carried out by or on behalf of the account holder (including any

payment from the account to the account holder).

5.8.11 In Case Where Conducting the CDD Measure is not Possible

a. If conducting the CDD measure becomes impossible because of the non cooperating behavior

of the customer or if the collected information seemed to be unreliable, that is, the branch or

authorized subsidiary or concerned Head Office Division could not collect satisfactory

information on customer identification and could not verify that, they should take the

following measures:

i. must not carry out a transaction with or for the customer through a bank account;

ii. must not establish a business relationship or carry out an occasional transaction with

the customer;

iii. must terminate any existing business relationship with the customer;

iv. must consider whether it ought to be making a report to CCU for ultimate submission

to the BFIU through an STR.

b. The branch or authorized subsidiary or concerned Head Office Division should always

consider whether an inability to apply CDD measures is caused by the customer. In this case,

they should consider whether there are any other ways of being reasonably satisfied as to

the customer’s identity. In either case, they should consider whether there are any

circumstances which give grounds for making a report to CCU for ultimate submission to

BFIU.

c. If the branch or authorized subsidiary or concerned Head Office Division concludes that the

circumstances do give reasonable grounds for knowledge or suspicion of money laundering

or terrorist financing, a report must be sent to CCU for ultimate submission to the BFIU. The

branch or authorized subsidiary or concerned Head Office Division must then retain the funds

until consent has been given to return the funds to the source from which they came.

d. If the branch or authorized subsidiary or concerned Head Office Division concludes that there

are no grounds for making a report, it will need to make a decision on the appropriate course

of action. This may be retaining the funds while it seeks other ways of being reasonably

satisfied as to the customer’s identity, or returning the funds to the source from which they

came. Returning the funds in such a circumstance is part of the process of terminating the

relationship; it is closing the account, rather than carrying out a transaction with the

customer through a bank account.

5.8.12 Persons without Standard Identification Documents

a. It is to be realized that most of the people need to make use of the financial system at some

point in their lives. It is important, therefore, that the socially or financially disadvantaged

such as the elderly, the disabled, street children or people, students and minors shall not be

precluded from obtaining financial services just because they do not possess evidence of

identity or address where they cannot reasonably be expected to do so.



b. In these circumstances, a common sense approaches and some flexibility considering risk

profile of the prospective customers without compromising sufficiently rigorous anti-money

laundering procedures is recommended by BFIU.

c. The branch or authorized subsidiary or concerned Head Office Division advised to allow

above considerations, and must find out alternative ways on how identity can be confirmed

in these exceptional circumstances considering.

d. Where the individual lives in accommodation for which he or she is not financially

responsible, or for which there would not be documentary evidence of his/her address, it

may be acceptable to accept a letter from the guardian or a similar professional as

confirmation of a person’s address.

e. A manager or head of the division or subsidiary may authorize the opening of a business

relationship if s/he is satisfied with confirmation of identity circumstances but must record

his/her authorization on the customer’s file, and must also retain this information in the

same manner and for the same period of time as other identification records.

f. For students or other young people, the normal identification procedures set out in the

preceding paragraphs should be followed as far as possible. Where such procedures would

not be relevant, or do not provide satisfactory evidence of identity, verification might be

obtained in the form of the home address of parent(s), or by making enquiries of the

applicant’s educational institution. Under normal circumstances, a family member or

guardian who has an existing relationship with the institution concerned would introduce a

minor. In cases where the person opening the account is not already known, the identity of

that person, and any other person who will have control of the account, should be verified.

5.8.13 Walk-in/One Off Customers

a. Walk-in/one off customer means a customer who has no account in the bank.

b. Branch or authorized subsidiary or concerned Head Office Division shall collect & preserve

following information while issuing DD/PO or serving for TT/MT for transferring fund at the

request of Walk-in/one off customer:

i. complete and accurate information of sender/originator/applicant;

ii. complete and accurate information of sender/originator/applicant;

iii. Purpose of the transfer of the fund/remittance; and

iv. Source of fund.

c. Complete refers to combination of all information for verifying the identity of the person or

entity such as sender’s/applicant’s & receiver’s/beneficiary’s name, present & permanent

addresses, Passport/NID/Birth Certificate/acceptable any photo ID, phone/active mobile no.

etc.; and accurate refers to such complete information that has been verified for accuracy.

d. A detail provisions in this regard are discussed in the chapter xx for wire transfer & money or

value transfer services of this Guidelines.



e. Branch or authorized subsidiary or concerned Head Office Division shall collect complete and

accurate information of any person other than customer deposit or withdrawal using on-line

facilities. Additionally, in regards to on-line deposit banks should identify sources of funds as

well.

5.8.14 Non Face to Face Customers

a. ‘Non face to face customer’ refers to “the customer who opens and operates his account by

agent of the bank or by his own professional representative without having physical presence

at the bank branch”.

b. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &

other information of the customer as per paragraph 5.1.1 of this guidelines.

c. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

CDD measures on customer, authorized person(s) or professional representative and

beneficiary owner(s) as specified in the paragraph 5.8.1 to 5.8.9 of this guidelines;

d. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize these

accounts as high risks accounts and apply enhanced due diligence as specified in the

paragraph 5.6 of this guidelines.

e. Branches or authorized subsidiaries or concerned Head Office Divisions are required to

physically verify the residential & business addresses of such customers.

f. Branches or authorized subsidiaries or concerned Head Office Divisions shall obtain senior

managements’ approval before establishing such business relationship.

g. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of

such accounts and apply applicable ongoing CDD measures as specified in the paragraph 5.5

of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts as specified in the chapter 10 of this guidelines and generate

STR report whenever there is any unusual or suspicious transactions as specified in the

chapter 12 of this guidelines.

5.8.15 Corresponding Banking

a. ‘Cross Border Correspondent banking’ shall refer to “providing banking services to another

bank (respondent) by a bank (correspondent). These kinds of banking services shall refer to

credit, deposit, collection, clearing, payment, cash management, international wire transfer,

drawing arrangement for demand draft or other similar services.

b. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &


c. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

CDD measures on customer, authorized person(s) or professional representative and

beneficiary owner(s) as specified in the paragraph 5.8.1 to 5.8.9 of this guidelines;



d. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize these



e. The branch or authorized subsidiary or concerned Head Office Division shall establish Cross

Border Correspondent Banking relationship after being satisfied about the nature of the

business of the correspondent or the respondent bank through collection of additional

information as per annexure E as indicated in the BFIU master circular-10 dated 28

December, 2014.

f. The branch or authorized subsidiary or concerned Head Office Division shall also obtain

approval from its senior management before establishing and continuing any correspondent

relationship.

g. The branch or authorized subsidiary or concerned Head Office Division must be sure about

the effective supervision of that foreign correspondent or respondent bank by the relevant

regulatory authority before establishing and continuing any relationship.

h. The branch or authorized subsidiary or concerned Head Office Division shall not establish or

maintain any correspondent relationship with any shell bank. Shell bank means a bank that

has no physical presence in the country in which it is incorporated and licensed, and which is

unaffiliated with a regulated financial group that is subject to effective consolidated

supervision. Physical presence means meaningful mind and management located within a

country. The existence simply of a local agent or low level staff does not constitute physical

presence.

i. The branch or authorized subsidiary or concerned Head Office Division shall not establish or

maintain any relationship with those correspondent or respondent banks that establish

correspondent banking relationship or maintain accounts with or provide services to a shell

bank.

j. The branch or authorized subsidiary or concerned Head Office Division shall not establish or

maintain any correspondent relationship with any institution which is listed a entity in TFS of

UNSCR or OFAC and/or located in a sanctioned country and/or its’ owner(s)/director(s),

beneficiary owner(s), senior management are not listed in TFS of UNSCR or OFAC;

k. The branch or authorized subsidiary or concerned Head Office Division shall pay particular

attention or conduct Enhanced Due Diligence while establishing or maintaining a

correspondent banking relationship with banks incorporated in a jurisdiction that do not

meet or have significant deficiencies in complying international standards for the prevention

of money laundering and terrorist financing (such as the countries and territories enlisted in

High–Risk and Non-Cooperative Jurisdictions in the Financial Action Task Force’s Public

Statement). Detailed information on the beneficial ownership of such banks and extensive

information about their policies and procedures on preventing money laundering and

terrorist financing shall have to be obtained.

l. If any respondent bank allow direct transactions by their customers to transact business on

their behalf (i.e. payable through account), the corresponding bank, i.e., the branch or

authorized subsidiary or concerned Head Office Division must be sure about the followings:

i. The respondent bank has conducted appropriate CDD of the customer; and



ii. Upon request of the correspondent bank, the respondent bank shall be able to

provide all CDD information of the respective customer it has to be ensured that

collecting the information on CDD of the respective customer.

Here, ‘Payable through accounts’ refers to “Corresponding accounts that are used directly by

third parties to transact business on their behalf.”

m. The branch or authorized subsidiary or concerned Head Office Division is required to screen

the correspondent or respondent bank, owners/directors, beneficiary owner(s) and

authorized person(s), if any, for the sanctions as specified in the paragraphs 9.11.1 to 9.11.12

and do the needful for preventing TF & PF as specified in the paragraph 9.12 of this

Guidelines;

n. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of

such accounts and apply applicable ongoing CDD measures as specified in the paragraph 5.5 of

this guidelines.

o. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts as specified in the chapter 10 of this guidelines and generate

STR report whenever there is any unusual or suspicious transactions as specified in the

chapter 12 of this guidelines.

5.8.16 Politically Exposed Persons (PEPs)

a. Politically Exposed Persons (PEPs) refer to “Individuals who are or have been entrusted with

prominent public functions by a foreign country, for example Heads of State or of

government, senior politicians, senior government, judicial or military officials, senior

executives of state owned corporations, important political party officials.”

b. The following individuals of other foreign countries must always be classed as PEPs:

i. heads and deputy heads of state or government;

ii. senior members of ruling party;

iii. ministers, deputy ministers and assistant ministers;

iv. members of parliament and/or national legislatures;

v. members of the governing bodies of major political parties;

vi. members of supreme courts, constitutional courts or other high-level judicial bodies

whose decisions are not subject to further appeal, except in exceptional

circumstances;

vii. heads of the armed forces, other high ranking members of the armed forces and

heads of the intelligence services;

viii. heads of state-owned enterprises.

c. Branches or authorized subsidiaries or concerned Head Office Divisions are required to adopt

the Risk Based Approach & use the software called Accuity Online Compliance Solution to

determine whether a customer or the real beneficial owner of an account is PEP.

d. If the real beneficiary owner of an account is a PEP, the account shall be treated as an

account of PEP and CDD measures for the PEP customer shall be applicable.

e. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &

other information of the PEP customer as per paragraph 5.1.1 of this guidelines.



f. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

normal CDD measures on PEP customer, authorized person(s) or professional representative

and beneficiary owner(s) as specified in the paragraphs 5.8.1 to 5.8.9 of this guidelines;

g. Branches or authorized subsidiaries or concerned Head Office Divisions shall take reasonable

measures to establish the source of fund of a PEP’s account as specified in the paragraph

5.8.9 of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize these



i. Branches or authorized subsidiaries or concerned Head Office Divisions shall obtain senior


j. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of


of this guidelines.

k. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts in a regular basis as specified in the chapter 10 of this

guidelines and generate STR report whenever there is any unusual or suspicious transactions

as specified in the chapter 12 of this guidelines.

l. Branches or authorized subsidiaries or concerned Head Office Divisions must comply all

provisions of Foreign Exchange Regulation Act, 1947 and issued circulars, rules and

regulations by Bangladesh Bank under this act.

5.8.17 Influential Persons (IPs)

a. ‘Influential persons’ refers to, “Individuals who are or have been entrusted with prominent

public functions, for example Heads of State or of government, senior politicians, senior

government, judicial or military officials, senior executives of state owned corporations,

important political party officials.”

b. The following individuals must always be classed as Influential persons:

i. heads and deputy heads of state or government;

ii. senior members of ruling party;

iii. ministers, state ministers and deputy ministers;

iv. members of parliament and/or national legislatures;

v. members of the governing bodies of major political parties;

vi. Secretary, Additional secretary, joint secretary in the ministries;

vii. Judges of supreme courts, constitutional courts or other high-level judicial bodies

whose decisions are not subject to further appeal, except in exceptional

circumstances;(h) governors, deputy governors, executive directors and general

managers of central bank;

viii. heads of the armed forces, other high ranking members of the armed forces and

heads of the intelligence services;



ix. heads of state-owned enterprises;

x. members of the governing bodies of local political parties;

xi. ambassadors, chargés d’affaires or other senior diplomats;

xii. city mayors or heads of municipalities who exercise genuine political or economic

power;

xiii. board members of state-owned enterprises of national political or economic

importance.

c. Whether an individual is an influential person or not will depend on the prominence or

importance of the function that he/she holds, and the level of corruption in the country,

the reputation and personal links of the individual and whether he/she has any links to

industries that are prone to corruption. If the individual does not hold sufficient influence

to enable them to abuse his/her power for gain, they should not be classified as an

influential person.

d. Branches or authorized subsidiaries or concerned Head Office Divisions are required to

adopt the Risk Based Approach & use the software called Accuity Online Compliance

Solution to determine whether a customer or the real beneficial owner of an account is

IP.

e. If the real beneficiary owner of an account is a IP, the account shall be treated as an

account of IP and CDD measures for the IP customer shall be applicable.

f. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC

& other information of the IP customer as per paragraph 5.1.1 of this guidelines.

g. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct

specific regular CDD measures on IP customer, authorized person(s) or professional

representative and beneficiary owner(s) as specified in the paragraphs 5.8.1 to 5.8.9 of

this guidelines;

h. Branches or authorized subsidiaries or concerned Head Office Divisions shall take

reasonable measures to establish the source of fund of an IP’s account as specified in the

paragraph 5.7.9 of this guidelines.

i. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize

these accounts as high risks accounts and apply enhanced due diligence as specified in

the paragraph 5.6 of this guidelines.

j. Branches or authorized subsidiaries or concerned Head Office Divisions shall obtain

senior managements’ approval before establishing such business relationship.

k. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list

of such accounts and apply applicable ongoing CDD measures as specified in the


l. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the


guidelines and generate STR report whenever there is any unusual or suspicious

transactions as specified in the chapter 12 of this guidelines.



5.8.18 Chief Executive of any International organization or any top level official

a. ‘Chief executive of any international organization or any top level official’ refers to,

“Persons who are or have been entrusted with a prominent function by an international

organization refers to members of senior management, i.e. directors, deputy directors and

members of the boards or equivalent functions.”

b. The heads of international organisations and agencies that exercise genuine political or

economic influence (e.g. the United Nations, the International Monetary Fund, the World

Bank, the World Trade Organisation, the International Labour Organization) must always be

classed as this category.

c. Branches or authorized subsidiaries or concerned Head Office Divisions are required to adopt

the Risk Based Approach & use the software called Accuity Online Compliance Solution to

determine whether a customer or the real beneficial owner of an account is CEO or top level

officials of any international organization.

d. If the real beneficiary owner of an account is a CEO or top level officials of any international

organization, the account shall be treated as an account of CEO or top level officials of any

international organization and CDD measures for the CEO or top level officials of any

international organization shall be applicable.

e. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &

other information of the CEO or top level officials of any international organization customer

as per paragraph 5.1.1 of this guidelines.

f. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

regular CDD measures on CEO or top level officials of any international organization

customer, authorized person(s) or professional representative and beneficiary owner(s) as

specified in the paragraphs 4.8.1 to 5.8.9 of this guidelines;


measures to establish the source of fund of a CEO or top level officials of any international

organization’s account as specified in the paragraph 5.8.9 of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize these



i. Branches or authorized subsidiaries or concerned Head Office Divisions shall obtain senior


j. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of


of this guidelines.

k. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the



as specified in the chapter 12 of this guidelines.



l. Branches or authorized subsidiaries or concerned Head Office Divisions must comply all

provisions of Foreign Exchange Regulation Act, 1947 and issued circulars, rules and

regulations by Bangladesh Bank under this act.

5.8.19 Close Family Members and Close Associates of PEPs, IPs and Chief Executives or Top Level

Officials of any International organization

a. Close family members and close associates of PEPs, IPs and chief executives or top level

officials of any international organization will also be classified as the same category.

b. Close Family Members include:

i. the PEP’s/influential persons/chief executive of any international organization or

any top level official’s spouse (or any person considered as equivalent to the

spouse);

ii. the PEP’s/influential persons/chief executive of any international organization or

any top level official’s children and their spouses (or persons considered as

equivalent to the spouses); and

iii. the PEP’s/influential persons/chief executive of any international organization or

any top level official’s parents;

c. There may be exceptional circumstances where the individual should not be classified as a

‘Close Family Member’ of the PEP, such as estrangement, divorce etc. In such cases, the

circumstances must be thoroughly investigated, examined and caution exercised.

d. In addition, where other family members such as the siblings, cousins, relatives by marriage of

the PEP are deemed, by virtue of the nature of the relationship, to have a close relationship

with the PEP, they should also be classified as PEPs.

e. A Close Associate of a PEP/Influential Person/Chief executive of any international organization

or any top level official includes:

i. an individual who is known to have joint beneficial ownership or control of legal

entities or legal arrangements, or any other close business relations with the PEP/

Influential Person/Chief executive of any international organization or any top

level official; and

ii. an individual who has sole beneficial ownership or control of a legal entity or legal

arrangement which is known to have been set up for the benefit of the PEP/

Influential Person/Chief executive of any international organization or any top

level official.

f. In addition, it should include any person publicly or widely known to be a close business

colleague of the PEP, including personal advisors, consultants, lawyers, accountants, colleagues

or the PEP’s fellow shareholders and any person(s) that could potentially benefit significantly

from close business associations with the PEP.

g. Branches or authorized subsidiaries or concerned Head Office Divisions are required to adopt

the Risk Based Approach to determine whether a customer or the real beneficial owner of an

account is close family members and close associates of PEPs, IPs and chief executives or top

level officials of any international organization.



h. If the real beneficiary owner of an account is a close family members and close associates of

PEPs, IPs and chief executives or top level officials of any international organization, the

account shall be treated as an account of PEPs, IPs and chief executives or top level officials of

any international organization and CDD measures for the them shall be applicable.

i. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &

other information of the close family members and close associates of PEPs, IPs and chief

executives or top level officials of any international organization as per paragraph 5.1.1 of this

guidelines.

j. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

CDD measures on close family members and close associates of PEPs, IPs and chief executives

or top level officials of any international organization, authorized person(s) or professional

representative, PEPs, IPs and chief executives or top level officials of any international

organization and beneficiary owner(s) as specified in the paragraphs 5.8.1 to 5.8.9 of this

guidelines;

k. Branches or authorized subsidiaries or concerned Head Office Divisions shall take reasonable

measures to establish the source of fund of a close family member and close associate of PEPs,

IPs and chief executives or top level officials of any international organization’s account as

specified in the paragraph 5.8.9 of this guidelines.

l. Branches or authorized subsidiaries or concerned Head Office Divisions must categorize these

accounts as high risks accounts and apply enhanced due diligence as specified in the paragraph

4.6 of this guidelines.

m. Branches or authorized subsidiaries or concerned Head Office Divisions shall obtain senior


n. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of such

accounts and apply applicable ongoing CDD measures as specified in the paragraph 5.5 of this

guidelines.

o. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts in a regular basis as specified in the chapter 10 of this guidelines

and generate STR report whenever there is any unusual or suspicious transactions as specified

in the chapter 12 of this guidelines.

p. Branches or authorized subsidiaries or concerned Head Office Divisions must comply all

provisions of Foreign Exchange Regulation Act, 1947 and issued circulars, rules and regulations

by Bangladesh Bank under this act.

5.8.20 Reliance on Third Party

a. Branches or authorized subsidiaries or concerned Head Office Divisions can rely on the third

parties to perform the CDD measures with the prior permission of Bangladesh Bank through

Head Office which may includes:

i. identify and verify customer identity;

ii. identify the beneficial ownership and control structure; and

iii. identify the purpose and nature of the business relationship.



b. Reliance on third party must be under the following criteria:

i. A third party must immediately obtain necessary information related to paragraphs

5.8.20a(i), 5.8.20a(ii) and 5.8.20a(iii) as mentioned above;

ii. All necessary data and documents held with the third party must be available for the

branches or authorized subsidiaries or concerned Head Office Divisions without any

delay;

iii. Branches or authorized subsidiaries or concerned Head Office Divisions must be satisfied

that third party is regulated, supervised and monitored for, and has taken appropriate

measures in compliance with CDD and record keeping requirements set out in the AML &

CFT Guidelines & circulars issued by BFIU. Branches or authorized subsidiaries or

concerned Head Office Divisions must also take senior management approval from Head

Office in this regard.

5.8.21 Management of Legacy Accounts

a. Legacy account refers to those accounts which were opened before 30 April, 2002 and are yet

to update KYC procedures.

b. Branches or authorized subsidiaries or concerned Head Office Divisions are required to treat

these legacy accounts as "Dormant".

c. No withdrawal shall be permitted in those accounts; however, deposit can be permitted. These

accounts will be fully functional only after conducting proper CDD measures.

d. Central Compliance Unit should preserve data of such accounts at their end.

5.8.22 High Risk Countries

a. Branches or authorized subsidiaries or concerned Head Office Divisions are required to conduct

enhanced CDD and any other measures that have a similar effect in mitigating risks for business

relationships and transactions with any person or entity from countries identified by the FATF

or BFIU as having on-going or substantial ML/TF risks.

b. Where ML/TF risks are assessed as higher risk, branches or authorized subsidiaries or

concerned Head Office Divisions are required to conduct enhanced CDD and any other

measures that have a similar effect in mitigating risks for business relationships and

transactions with any person or entity from countries identified by the FATF or BFIU as having

strategic AML/CFT deficiencies and have not made sufficient progress in addressing those

deficiencies.

c. In addition to the enhanced CDD requirement under sub-paragraph 4.8.22(a), branches or

authorized subsidiaries or concerned Head Office Divisions are required to apply appropriate

countermeasures, proportionate to the risk, for higher risk countries listed as having on-going

or substantial ML/TF risks, as follows:



i. limiting business relationship or financial transactions with identified countries or

persons located in the country concerned;

ii. review and amend, or if necessary terminate, correspondent banking relationships

with financial institutions in the country concerned;

iii. conduct enhanced external audit, by increasing the intensity and frequency, for

branches and subsidiaries of the reporting institution or financial group, located in the

country concerned;

iv. submit a report with a summary of exposure to customers and beneficial owners

from the country concerned to CCU for review and submission to BFIU, if necessary, on

an quarterly basis; and

v. conduct any other measures as may be specified by BFIU.



CHAPTER 06

Wire Transfers & Money or Value Transfer Services

6.1 Wire Transfers

6.1.1 Wire Transfer Related Definitions

Accurate - is used to describe complete information that has been verified for accuracy.

Beneficiary - refers to the natural or legal person or legal arrangement who is identified by the

originator as the receiver of the requested wire transfer.

Beneficiary Financial Institution - refers to the financial institution which receives the wire

transfer from the ordering financial institution directly or through an intermediary financial

institution and makes the funds available to the beneficiary.

Cross-border wire transfer - refers to any wire transfer where the ordering financial institution

and beneficiary financial institution are located in different countries. This term also refers to any

chain of wire transfer in which at least one of the financial institutions involved is located in a

different country.

Complete – refers to combination of all information for verifying the identity of the person or

entity. For example: name and detail address of beneficiary/applicant, account number (if any),

passport/national ID card/ birth certificate accompanied by acceptable identification certificate

with photo/any other acceptable photo ID, phone/active mobile number, etc.

Domestic wire transfers - refers to any wire transfer where the ordering financial institution and

beneficiary financial institution are located in the same country. This term therefore refers to any

chain of wire transfer that takes place entirely within the borders of a single country, even

though the system used to transfer the payment message may be located in another country.

Intermediary financial institution - refers to a financial institution in a serial or cover payment

chain that receives and transmits a wire transfer on behalf of the ordering financial institution

and the beneficiary financial institution, or another intermediary financial institution.

Meaningful – refers to such complete information which are apparently seems to be correct but

not verified for accuracy.

Ordering financial institution - refers to the financial institution which initiates the wire transfer

and transfers the funds upon receiving the request for a wire transfer on behalf of the originator.

Originator/Applicant - refers to the account holder who allows the wire transfer from that

account, or where there is no account, the natural or legal person that places the order with the

ordering financial institution to perform the wire transfer.

Wire transfer - refers to any transaction carried out on behalf of an originator through a financial

institution by electronic means with a view to making an amount of funds available to a

beneficiary person at a beneficiary financial institution, irrespective of whether the originator and

the beneficiary are the same person.



6.2 General Requirements

6.2.1 The requirements under this chapter are applicable to cross-border wire transfers, money or

value transfer services (MVTS) and domestic wire transfers including serial payments, cover

payments.

6.2.2 Where relevant, references to a “customer” in this chapter include originators, beneficiaries and

beneficiary owners of wire transfers or fund transfers.

6.2.3 Branch or Authorized Subsidiary or concerned Head Office Divisions must conduct applicable

appropriate CDD measures as specified in the chapter four (Customer Due Diligence) of this

guidelines before making payment of any inward remittance & executing any outward

remittance.

6.2.4 Branches or Authorized Subsidiaries or concerned Head Office Divisions are required to conduct

enhanced CDD specified in the paragraph 4.6 chapter four (Customer Due Diligence) of this

guidelines for business relationships and transactions with any person or entity from countries

identified by the FATF or BFIU as having on-going or substantial ML/TF risk (higher risk countries).

6.2.5 Branch or Authorized Subsidiary or concerned Head Office Division shall not execute the wire

transfer or provide money or value transfer services (MVTS) if it does not comply with the

requirements specified in this Chapter.

6.2.6 Branch or Authorized Subsidiary or concerned Head Office Division must comply the Bangladesh

Bank Guidelines for Foreign Exchange Transactions; circulars issued by Bangladesh Bank & BFIU,

& other applicable acts, rules & regulations for executing any cross border wire transfer.

6.2.7 Branches or Authorized Subsidiaries or concerned Head Office Divisions are required to

screen/check the names of the originator(s), beneficiary(ies), beneficiary owner(s), ordering

institution, intermediary institution(s) appearing in any wire transfer message or MVTS

instruction against the names in the Targeted Financial Sanctions databases of UNSC & BFIU . If

there is any name match, it is required to take reasonable and appropriate measures to verify

and confirm the identity of name(s) match. Once confirmation has been obtained about the true

matching, branches or authorized subsidiaries or concerned Head Office Divisions must

immediately stop the payment or transfer of fund and report it to CCU so that CCU can report it

to BFIU within next working day.

6.2.8 Branch or Subsidiary or concerned Head Office Division are required to maintain all originator

and beneficiary information collected in accordance with record keeping requirements under

Chapter Thirteen.

6.2.9 Branches or Authorized Subsidiaries or concerned Head Office Divisions shall not undertake any

transactions without face-to-face contact with the customer unless the business relationship with

the customer has been first established and CDD measures have duly been conducted as per

chapter five of this guidelines.

6.3 Ordering Banks/Institutions (Banks/Institutions Conducting Outward Remittance)

Cross Border Wire Transfer

6.3.1 Branches or Authorized Subsidiaries or concerned Head Office Divisions which are the ordering

banks/Branches are required to ensure that the message or payment instruction for all cross-

border wire transfers involving an amount equivalent to USD.1000.00 and above are



accompanied by the following information before transmitting the same to

Intermediary/Beneficiary Banks:

a. Collected & preserved the complete and accurate originator/applicant information such as:

(i) name;

(ii) account number (or a unique reference number if there is no account number) which

permits traceability of the transaction;

(iii) residential or mailing address ;

(iv) NID/Birth Registration/Any acceptable ID with Photo;

(v) Phone/Active Mobile No.

b. Collected & preserved the meaningful beneficiary information such as :

(i) name;

(ii) account number (or a unique reference number if there is no account number), which

permits traceability of the transaction; and

(iii) Details Address.


banks/Branch are required to ensure that the message or payment instruction for all cross-

border wire transfers involving an amount below USD.1000.00 are accompanied by the following

information before transmitting the same to Intermediary/Beneficiary Banks:

a. Collected & preserved the complete and meaningful originator/applicant information such

as:

(i) name;






b. Collected & preserved the meaningful beneficiary information such as :

(i) name;



(iii) Address in Details.

6.3.3 Where several individual cross-border wire transfers from a single originator are bundled in a

batch file for transmission to beneficiaries, the batch file shall contain Complete and accurate

originator information, and beneficiary information, that is fully traceable within the beneficiary

country; and Branches or Authorized Subsidiaries or concerned Head Office Divisions are required

to include the originator’s account number or unique transaction reference number

6.3.4 Where required information in the paragraphs 6.3.1 indicates “Accurate Information”, Branches

or Authorized Subsidiaries or concerned Head Office Divisions are required to verify those

information to ascertain its’ accuracy using reliable, independent source documents, data or

information.



6.3.5 The meaningful information required under Paragraphs 6.3.1 & 6.3.2 need not be verified for

accuracy except when there is a suspicion of ML/TF.

Domestic Wire Transfer


banks/Branches are required to ensure that the message or payment instruction for all domestic

wire transfers involving an amount of Tk.25,000.00 and above are accompanied by the

information as mentioned in the paragraph 6.3.1(a)(b) for cross-border wire transfer before

transmitting the same to Intermediary Banks/Beneficiary Banks/Organizations.


banks/Branches are required to ensure that the message or payment instruction for all domestic

wire transfers involving an amount below Tk.25,000.00 are accompanied by the information as

mentioned in the paragraph 6.3.2(a)(b) for cross-border wire transfer before transmitting the

same to Intermediary Banks/Beneficiary Banks/Organizations.

6.3.8 Where required information in the paragraphs 6.3.6 & 6.3.7 indicates “Accurate Information”,

Branches or Authorized Subsidiaries or concerned Head Office Divisions are required to verify

those information to ascertain its’ accuracy using reliable, independent source documents, data

or information.

6.3.9 The meaningful information required under Paragraphs 6.3.6 & 6.3.7 need not be verified for

accuracy except when there is a suspicion of ML/TF.


banks/Branches are required to collect & preserve documents and information as per paragraphs

6.3.6 to 6.3.9 in addition to KYC format as supplied by Bangladesh Bank Payment System

Department vide their circulars time to time.


banks/Branches are required to collect & preserve documents & information as per paragraphs

6.3.6 to 6.3.9 in case of wire transfer using credit or debit or prepaid cards (except purchase of

goods and/or service).

6.3.12 It is not compulsory to comply paragraphs 6.3.10 & 6.3.11 in case of wire transfers in favor of

Government/Semi-government/Autonomous bodies/organizations. Besides these paragraphs are

also no applicable for interbank transactions, i.e., where both the applicant and beneficiary are

either banks or financial institutions.

6.4 Intermediary Banks/Institutions

6.4.1 Branches or Authorized Subsidiaries or concerned Head Office Divisions which are the

intermediary banks/ institutions are required to ensure the followings:

a. For both cross-border wire transfers & domestic wire transfers, intermediary institutions are

required to retain all originator and beneficiary information that accompanies a wire transfer.

b. Where the required originator or beneficiary information accompanying a cross-border wire

transfer or domestic wire transfer cannot be transmitted due to technical limitations,

intermediary banks/institutions are required to keep a record in accordance with record



keeping requirements under chapter 13, for at least five years, of all information received

from the ordering bank/institution or another intermediary bank/financial institution.

c. Intermediary banks/institutions are required to take reasonable measures, which are

consistent with straight-through processing, to identify cross-border wire transfers that lack

the required originator information or required beneficiary information.

d. Intermediary institutions are required to have effective risk-based policies and procedures for

determining: (a) when to execute, reject, or suspend a wire transfer lacking required

originator or required beneficiary information; and (b) the appropriate follow-up action.

6.5 Beneficiary Banks/Institutions (Banks/Institutions Conducting Inward Remittance)


beneficiary banks/Branches are required to ensure that the message or payment instruction for

all cross-border wire transfers involving any amount are accompanied by the following

information before disbursing the amount to beneficiaries:

a. Complete originator/applicant information such as:

(i) name;




b. Complete and meaningful beneficiary information such as :

(i) name;



(iii) Details Address.

6.5.2 Where cross-border wire transfers or fund transfers lack complete originator/applicant

information, Branches or Authorized Subsidiaries or concerned Head Office Divisions which are

the beneficiary banks/Branches are required to contact the concerned parties for complete

information or may collect complete information from any other reliable & acceptable sources.


beneficiary banks/Branches are required to collect the following beneficiary information at the

time of payment of any inward cross-border wire transfer or fund transfer & preserve the same

information for at least five years in accordance with record keeping requirements under chapter

13:

a. complete & accurate beneficiary information such as:

(i) name;








6.5.4 Branches or Authorized Subsidiaries or concerned Head Office Divisions are required to verify the

information collected in accordance with paragraph 6.5.3(a) to ascertain its’ accuracy using

reliable, independent source documents, data or information.

6.5.5 Beneficiary institutions are required to have effective risk-based policies and procedures for

determining: (a) when to execute, reject, or suspend a wire transfer lacking the required

originator or required beneficiary information; and (b) the appropriate follow-up action.

6.6 Money or Value Transfer Services (MVTS)

6.6.1 Money or Value Transfer Services Related Definitions

Money Value Transfer Service: Money or Value Transfer Services (MVTS) as defined by the FATF:

“Money or value transfer services (MVTS) refers to financial services that involve the acceptance

of cash, cheques, other monetary instruments or other stores of value and the payment of a

corresponding sum in cash or other form to a beneficiary by means of a communication,

message, transfer, or through a clearing network to which the MVTS provider belongs.

Transactions performed by such services can involve one or more intermediaries and a final

payment to a third party, and may include any new payment methods. Sometimes these services

have ties to particular geographic regions.”

MVTS provider: Any natural or legal person who is licensed or registered to provide MVTS as a

business, by a competent authority, including through agents or a network of agents. This also

includes HOSSPs meeting the aforementioned criteria.

Hawala and other similar service providers (“HOSSP”): Generally referred to as entities that

provide MVTS, particularly with ties to specific geographical regions or ethnic communities,

which arrange for transfer and receipt of funds or equivalent value which is settled through

trade, cash and/or net settlement over an extended period of time, rather than simultaneously

with the transfer.

Agent: Any natural or legal person providing MVTS on behalf of an MVTS provider, whether by

contract with or under the direction of the MVTS provider.

6.6.2 Key Features of MVTS

Some of the key features of MVTS are as follows:

� MVTS can be an attractive, often lower cost option for persons that need to send money

quickly to another person as funds can be picked up by a recipient in a relatively short

timeframe, as opposed to waiting for domestic or international wire transfers that may

take several days to process in some cases. The financial service provided by MVTS

providers is often cheaper than more conventional banking services and is frequently

used in regions with limited or no banking services.

� MVTS providers operate in a variety of ways, but typically a MVTS provider or sending

agent (acting on behalf of a MVTS provider) accepts payment of the money transfer,

collects the required identification information, and enters the transaction and sender’s

applicable identification information and the destined receiver systematically at the point

of origination.



� In the case of money transfer, the MVTS providers transfer the payment details to the

pay-out agent that will provide the funds or their equivalent to the beneficiary of the

transfer. The message is either sent directly to the agents or through a centralized

clearing house that serves as a centralized hub for information that connects different

agents of a provider.

� The money transfer is made available to the ultimate recipient, in the appropriate

currency, at a receiving agent (acting also on behalf of a MVTS provider) location in the

paying jurisdiction. The receiving agent will also collect and maintain the required

identification information at the point of destination in accordance with local applicable

law.

� Pay-out methods vary by jurisdiction, but may include cash, cheque, money order, pay-

out cards, mobile wallet, bank deposit or a combination.

6.6.3 Branches or Authorized Subsidiaries or concerned Head Office Divisions offering MVTS either

directly or as an agent to MVTS operators or providers or sub-agent to an agent of MTVS

operators or providers are required to comply with all of the relevant requirements under

Paragraphs 6.2.1 to 6.5.5 of this chapter on Wire Transfer (Remittance) of this document in the

countries in which they operate, directly or through their agents or sub-agents.

6.6.4 Where the Branches or Authorized Subsidiaries or concerned Head Office Divisions offering MVTS

control both the ordering and the beneficiary side of a wire transfer, the Branches or Authorized

Subsidiaries or concerned Head Office Divisions are required to:

a. take into account all the information from both the ordering and beneficiary sides in order to

determine whether a suspicious transaction report has to be filed; and

b. file a suspicious transaction report in any country affected by the suspicious wire transfer,

and make relevant transaction information available to our CCU for ultimate submission to

BFIU.



CHAPTER 07

Trade Based Money Laundering

7.1 Recognition of Trade Based Money Laundering & Terrorist Financing

a. Trade Based Money Laundering (TBML) has been recognized by the Financial Action Task Force

(FATF) in its landmark study published in 2006, as one of the three main methods by which

criminal organizations and terrorist financiers move money for the purpose of disguising its

origins and integrating it back into the formal economy. This method of ML is based upon

abuse of trade transactions and their financing. The FATF Study 2006 highlighted the increasing

attractiveness of TBML as a method for laundering funds, compared with misuse of the

financial system (both formal and alternate) and through physical movement of cash (cash

smuggling).

b. APG (2012) study on TBML, done six years after the landmark FATF Study of 2006, has

reaffirmed the conclusion of the earlier study that TBML is an important channel for criminal

organizations and terrorist financiers to move money or value to disguise its illicit origin and to

integrate it into the formal economy. The rapid growth in the global economy has made

international trade an increasingly attractive avenue to move funds through goods and

services.

c. Bangladesh Financial Intelligence Unit (BIFU) in its Money Laundering & Terrorist Financing Risk

Management Guidelines 2015 mentions that the international trade system is subject to a wide

range of risks and vulnerabilities which provide terrorist organizations the opportunity to

transfer value and goods through seemingly legitimate trade flows. To exploit the trade system

for terrorist financing purposes could assist in the development of measures to identify and

combat such activity.

7.2 Trade Based Money Laundering Related Definitions

Trade Based Money Laundering (TMBL) - FATF (20 June 2008) Best Practices Paper on TBML,

defined TBML as: the process of disguising the proceeds of crime and moving value through the use

of trade transactions in an attempt to legitimize their illicit origins or finance their activities.

Basic TBML Techniques – refers to the techniques through which money launderers or terrorist

financiers usually commits trade based money laundering. According to FATF (2006), the basic

techniques of trade-based money laundering include:

i. over- and under-invoicing of goods and services;

ii. multiple invoicing of goods and services;

iii. over- and under-shipments of goods and services; and

iv. falsely described goods and services.

APG (2012) identified additional four techniques of trade-based money laundering as:

i. cash inflow based payment;

ii. third party payment;

iii. segmental modes of payment; and

iv. alternative remittance payment.



7.3 Trade Finance Tools & Their Vulnerabilities

7.3.1 Documentary Credit/ Letter of Credit (LC)

a. General Features:

� Generally the exporter requires an importer to prepay in cash for goods shipped. The

importer naturally wants to reduce risk by asking the exporter to acknowledge through

documents that the goods have been shipped.

� The importer’s bank assists by providing a letter of Credit (Documentary credits) to the

exporter (or the exporter's bank) providing for payment upon presentation of certain

documents, either immediately or at a prescribed date.

� A letter of credit is a precise document whereby the importer’s bank extends credit to the

importer and assumes responsibility in paying the exporter.

� The documentary credit arrangement offers an internationally recognised and used

method of attaining a commercially acceptable undertaking by providing for payment to be

made against presentation of documentation representing the goods, making possible the

transfer of title to those goods.

b. Vulnerabilities:

� Even in this simple form the true value of goods transferred between countries can be

masked through misrepresentation of price, quantity and quality. Letters of Credit may be

generated to create a veneer.

� The documentation generated in the process leaves a paper trail which money launderer

may rely upon to disguise illegal proceeds.

7.3.2 Open Account Facilities


� Open account transactions can be described as ‘buy now, pay later’ and are more like

regular payments for a continuing flow of goods rather than specific transactions.

� The pursuit of ‘supply chain efficiencies’ among larger businesses has encouraged their

preference for open account trading.

� Open account facilities involve factoring & forfaiting. Factoring may be import factor or

export factor.

� Factoring, also known as invoice discounting, receivables factoring or debtor financing, is

where a third party company assumes a debtor invoice from another company. Factoring in

international trade is the discounting of a short-term receivable (up to 180 days).

� Forfaiting is the purchase of an exporter's receivables (the amount importers owe the

exporter) at a discount by paying cash. The purchaser of the receivables, or forfaiter, must

now be paid by the importer to settle the debt. The receivables have then become a form



of debt instrument that can be sold on the secondary market as bills of exchange or

promissory notes.

� Forfaiting is a method of trade financing that allows the exporter to sell its medium-term

receivables (180 days to 7 years) to the forfaiter at a discount, in exchange for cash.

b. Vulnerabilities:

� Open account facilities have caused a disconnect between the movement of the underlying

trade and the money used to finance it.

� Payments against these facilities may or may not be undertaken through an international

funds transfer instruction (IFTI) or SWIFT. Even if bank is aware of the payment, but will not

be aware of the reasons of the payment unless the relevant details are sought.

� Often the factor may be left with losses after the so-called traders disappear, after having

indulged in TBML, by moving illicit funds through ‘sham trade’.

� These instruments (exporter's receivables) are capable of being sold on the secondary

market as ‘bills of exchange’ or ‘promissory notes’, provides a money launderer with an

enhanced mechanism to move value.

� If the launderer, through collaboration, inflates the value of receivables, more value can be

moved.

7.3.3 Pre-Shipment Finance


� This is financing for the period prior to the shipment of goods, to support pre-export

activities like wages and other costs.

� It is especially needed when inputs for production must be imported. It also provides

additional working capital for the exporter.

� Pre-shipment financing is especially important to smaller enterprises because the

international sales cycle is usually longer than the domestic sales cycle.

� Pre-shipment financing can take the form of short-term loans, overdrafts and cash credits.

In Shariah based banks it can be in mechanism of Bai Salam, Bai Muazzal, Bai Murabaha,

etc.

b. Vulnerabilities:

� Pre-shipping finance especially its application to ‘inputs for production that must be

imported’ provides the money launderer with an ability to engage a third party in another

jurisdiction thus moving value to all venues in which the criminal syndicate are operating

and thus widen the scope for TBML.

� Short-term loans, overdrafts and cash credits may allow launderers to make business

claims on the relevant revenue agencies in those countries thus supplementing their

reasons for the value they hold.



7.3.4 Post-Shipment Finance


� This is financing for the period following shipment.

� The ability to be competitive often depends on the trader’s credit term offered to buyers.

� Post-shipment financing ensures adequate liquidity until the purchaser receives the

products and the exporter receives payment.

� Post-shipment financing is usually short-term.

� In Shariah based banks it can be in mechanism of Bai Salam, Bai Muazzal, Bai Murabaha,

Bai-as Sarf, Izra Bil Baiya, Musharaka, etc.

b. Vulnerabilities:

� Although this method of financing is short term by nature, cash is usually supplied at time

of sale; hence such pretence would not raise suspicion unless intelligence arouses such

suspicion.

7.3.5 Buyer’s Credit


� A financial arrangement whereby a financial institution in the exporting jurisdiction extends

a loan directly or indirectly to a foreign buyer to finance the purchase of goods and services

from the exporting jurisdiction.

� This arrangement enables the buyer to make payments due to the supplier under the

contract.

b. Vulnerabilities:

� Financing of the importer by an institution in the exporter’s jurisdiction widen the scope for

TBML, since to exercise due diligence in a foreign jurisdiction may be more difficult.

� The money launderers seek this credit to help minimize risk of confiscation.

� If a financial institution has a stake in the trade, law enforcement has to account for that

stake in any ensuing action unless the law enforcement action can demonstrate that the

financial institution in complicit.

7.3.6 Supplier’s Credit


� A financing arrangement under which an exporter extends credit to the buyer in the

importing jurisdiction to finance the buyer’s purchases.

b. Vulnerabilities:



� The utilization of Supplier’s Credit arrangements provide a mechanism to move significant

amounts of value in most forms irrespective of whether or not the trade is legitimate,

inflated or phantom.

� This financing arrangement need not involve a financial institution, although to reinforce

the veneer, engaging the third party may be undertaken in ML schemes.

� If the buyer and seller are in collusion, this mechanism is a channel for TBML

7.3.7 Countertrade


� Countertrade exists where economies face the problem of limited foreign exchange

holdings. That is, they do not hold enough currency of the jurisdiction they are trading with

to pay the outstanding debt and the cost of buying more foreign currency to service that

debt makes the trade uneconomical.

� One way to overcome this constraint is to promote and encourage countertrade. It

generally encompasses the idea of subjecting the agreement to purchase goods or services

to an undertaking by the supplier to take on a compensating obligation in lieu of a cash

settlement. The seller is required to accept goods or other instruments of trade in partial or

whole payment for its products. Some of the forms of counter trade include:

� Barter – This traditional type of countertrade involving the exchange of goods and

services against other goods and services of equivalent value, with no monetary

exchange between exporter and importer.

� Counter purchase – The exporter undertakes to buy goods from the importer or

from a company nominated by the importer, or agrees to arrange for the purchase

by a third party. The value of the counter-purchased goods is an agreed percentage

of the prices of the goods originally exported.

� Buy-back – The exporter of heavy equipment agrees to accept products

manufactured by the importer of the equipment as payment.

b. Vulnerabilities:

� The TBML vulnerabilities arise in determination of exchange ratios for the goods to be

countertraded. Such ratios may often be determined as a process of negotiation rather

than market determined, giving scope to TBML.

7.4 General CDD Requirements

7.4.1 The requirements under this chapter are applicable to export and import businesses, and/or any

other trade transaction executed through EXIM bank.

7.4.2 Where relevant, references to a “customer” in this chapter include importers, exporters,

foreign/local suppliers, foreign/local buyers, agents of the foreign suppliers, agents of the foreign

buyers, beneficiary owners, agents of foreign principals, authorized persons or entities related to

an international/local trade transaction.




appropriate CDD measures as specified in the chapter four (Customer Due Diligence) of this

guidelines before executing any international and/or local trade transaction in favor of their

customers or offering any trade finance and trade service related facility to their customers.

7.4.4 In case of higher risk scenario as mentioned in the paragraphs 2.10(a)(b)(c) of chapter two (RBA)

and/or similar situations, branch or authorized subsidiary or concerned Head Office Divisions

must conduct applicable appropriate enhanced due diligence (EDD) measures as specified in the

paragraph 4.6 of chapter four (Customer Due Diligence) of this guidelines before executing any

international and/or local trade transaction in favor of their customers or offering any trade

finance and trade service related facility to their customers.

7.4.5 Branch or Authorized Subsidiary or concerned Head Office Division shall not execute any

international and/or local trade transaction in favor of their customers or offering any trade

finance and trade service related facility to their customers if it does not comply with the

requirements specified in this Chapter.



import policy order, export policy, Foreign Exchange Regulation Act 1947 & other applicable acts,

rules & regulations for executing any international and/or local trade transaction in favor of their

customers or offering any trade finance and trade service related facility to their customers.


screen/check the persons, entities, third parties, goods, country, ports, point of transshipment,

carrier, master, agents and/or any other names or entities appearing in LC, sales contract and/or

presented document related to trade transactions against the names in the Targeted Financial

Sanctions databases of UNSC, OFAC & BFIU. If there is any name match, it is required to take

reasonable and appropriate measures to verify and confirm the identity of name(s) match. Once

confirmation has been obtained about the true matching, branches or authorized subsidiaries or

concerned Head Office Divisions must immediately stop the transaction and report it to CCU so

that CCU can report it to BFIU within next working day.

7.4.8 Branch or Subsidiary or concerned Head Office Division is required to maintain all information &

documents related to CDD, EDD (if any), sanctions screening, trade transactions, etc. in

accordance with record keeping requirements under chapter twelve.



the customer has been first established and CDD measures have duly been conducted as

specified in the chapter four of this guidelines.

7.5 Specific CDD Measures for Import Business

7.5.1 KYC Policy & Procedures

a. In addition to existing approval process for inducting any new import customer in our bank,

Branches or Authorized Subsidiaries or concerned Head Office Divisions are required comply

the generalized customer acceptance policy of this guidelines as specified in the paragraphs

4.3.1 to 4.3.2.18.



b. Branches or authorized subsidiaries or concerned Head Office Divisions are required to collect

or ensure the collection of complete & accurate KYC information of the customers before or

during executing any import related international and/or local trade transaction in favor of

their customers or offering any import related trade finance and trade service facility to their

customers as specified in the paragraph 5.1.1 of this guidelines.



addition to paragraph 5.1.1 up to their satisfaction which are required to conduct appropriate

due diligence considering the risk of the customer in the light of existing directions. Such

additional information may be related to:

i. The countries with which the importer trades;

ii. The goods they trade;

iii. Marketability & demand of the goods in local market;

iv. Yearly/half yearly/monthly sale or consumption of imported goods by the importer;

v. The role & location of the parties with whom the importer does business (e.g.

customers, suppliers, etc.);

vi. The role & location of the agents and other third parties used by the importer in

relation to the business;

vii. previous business performance; and

viii. any other required information up to satisfaction of the branch or authorized

subsidiary or concerned Head Office Divisions.

7.5.2 Collection & Verification of Import Related Documents

a. In addition to the documents collected for identification & verification of the

importer/customer as specified in the paragraphs 5.8.1.1 to 5.8.8.3 of chapter four of this

guidelines, branches or authorized subsidiaries or concerned Head Office are required to

collect the following applicable documents and verify the same using reliable, independent

source, documents or data before executing any import transaction.

i. Importers in both public sector and private sector:

� L/C Authorization (LCA) Form for import or opening Letter of Credit;

� Import application or L/C Application Form duly signed by the importer;

� Indents for goods issued by Indentor or a Proforma Invoice obtained from the

foreign supplier, as the case may be;

� Insurance Cover Note;

� IMP Forms duly signed by importer; and

� any other documents required.

ii. Additional documents for public sector importers- In addition to the documents

mentioned in the above sub-paragraph 7.5.2(a)(i):

� the attested photocopy of sanction letter from the administrative Ministry or

Division or Authority, wherever applicable;

iii. Additional documents to be furnished by private sector importers- In addition to the

documents mentioned in the above sub-paragraph 7.5.2(a)(i):



� Valid Membership certificate from the registered local Chamber of Commerce

and Industry or any Trade Association established on all Bangladesh basis,

representing any special trade/business;

� Renewed Import Registration Certificate for the concerned financial year;

� a declaration, in triplicate, that the importer has paid income-tax or submitted

income tax return for the preceding year;

� poof of having Tax Identification Number (TIN) in all cases of imports, excepting

personal use;

� any such document as may be required as per Public Notice, or Order issued by

Chief Controller, from time to time under the Import Policy Order in force;

� any other necessary papers or documents according to the Import Policy Order in

force;

� Insurance Cover Note either from Sadharan Bima Corporation or from any

Bangladeshi Insurance Company and duly stamped insurance policy against this

cover-note, which shall have to be submitted to the Customs Authority during

release of goods.

7.5.3 Assessment & Evaluation of Import Documents

7.5.3.1 AD branches or authorized subsidiaries or concerned Head Office Divisions are required to review

and evaluate:

a. KYC information & documents received as specified in the paragraph 7.5.1 (a)(b)(c) of

this chapter;

b. Import documents received from importer as per paragraph 7.5.2(a)(i)(ii)(iii) of this

chapter;

c. Import documents received from foreign/local exporter/supplier;

d. Import payment to be made to foreign/local exporter/supplier through their bank; and

e. Custom’s certified invoice or import bill of entry received from importer.

7.5.3.2 Assessment and Evaluation of KYC Information Documents

a. AD branches or authorized subsidiaries or concerned Head Office Divisions are required to review

and evaluate KYC information and documents to find out the likelihood & impact of the inherent

risk, categorize the customer as low or high risk customers, apply CDD measures as specified in

the paragraph 5.4 of chapter four of this guidelines.

b. AD branches or authorized subsidiaries or concerned Head Office Divisions may required to apply

enhanced due diligence where:

i. Importer falls into a higher risk category or where the nature of their trade as disclosed

during the standard due diligence process suggests that enhanced due diligence would

be prudent;

ii. The nature of business and the anticipated transactions as described and disclosed in

the initial due diligence stage may not necessarily suggest a higher risk category but if,

during the course of any transaction any high risk factors become apparent, this may

warrant additional due diligence;

iii. Transaction includes third party (i.e. parties not associated with EXIM bank),

middlemen or traders using back to back or transferable LCs or payments from offshore

deals;



iv. Customer/importer is a middle man or trader.

c. AD branches or authorized subsidiaries, if any or concerned Head Office Divisions may consider

the following where enhanced due diligence is required in addition to what specified in the

paragraph 4.6 of chapter four of this guidelines.

i. Identifying, understanding & verifying trade cycle of the importer;

ii. Identifying, understanding & verifying the cross border customs & licensing regulations;

iii. Establishing physical control over the goods; and

iv. Identifying & verifying of the payment flows.

7.5.3.3 Assessment and Evaluation of Import Documents Submitted by Importer

a. Appropriate reviewing should be conducted by AD branches or authorized Head Office Division

in relation to the Letter of Credit application or import requests when received from importer

which takes account of the following:

i. Screen the Sanctions & terrorist lists (BIFU, OFAC & UNSC) which may affect:

� Directly, supplier as a named target;

� The country in which supplier is located;

� The goods involved;

� The country where the goods are shipped from, disclosed transhipment points and

destination points;

� Other names appearing in the LC or sales contract.

ii. Check the countries which are rated as high risk for ML & FT in which:

� Supplier or their bank are located;

� The transportation of goods occurs through those countries;

iii. The goods described in the transaction to check that:

� The type, quantity and value of goods are consistent with what is known business of

importer;

� Price is internationally competitive;

� There are no generally known embargoes other than those arising from sanctions (local

law and UNSC sanctions)

iv. The seller (supplier) to check through collection of credit report that:

� The type, quantity and value of goods to be imported are consistent with business of

the supplier;

� Official name, address, phone number, fax number, etc. are consistent with what are

provided by the importer;

� Means, standing, commitment, credibility, goodwill, market reputation, operational

status and length of business are acceptable to bank.

v. Check the documents and be confirmed that the documents submitted by importer comply:



� the Bangladesh Bank Guidelines for Foreign Exchange Transactions;

� circulars issued by Bangladesh Bank & BFIU;

� import policy order in force;

� Foreign Exchange Regulation Act 1947; and

� other applicable acts, rules & regulations.

vi. Check and confirm that the importer has no overdue bill of entry;

vii. Checking for indicators of unusual aspects such as:

� Over-invoicing or under-invoicing;

� Involve unrelated parties;

� Involve highly unorthodox documentation;

� Involve a complex structure obscuring the true nature of the transaction;

� Involve other parties which as a result of any screening activity bank regards as

unacceptably high risk;

� Create an unusual trigger point for the payment to be made under the LC/sales

contract (e.g. Goods are shipped without the need for relevant documentation).

b. Depending on the information arising from this reviewing process :

i. Make further internal enquiries as to the appropriate course of action;

ii. Request more information from Importer before agreeing to proceed with the

transaction;

iii. Allow the transaction to proceed but make a record of the circumstances for review

purposes where appropriate or take senior management approval;

iv. Decline the transaction if enquiries do not provide reasonable explanations and submit

a suspicious transaction/activity report to CCU, Head Office.

7.5.3.4 Assessment and Evaluation of Import Documents Submitted by Supplier’s Bank

a. Appropriate reviewing should be conducted by AD branches or authorized Head Office Division

in relation to the documents received from importer’s bank against the Letter of Credit or LCAF

which takes account of the following:

i. Check & ensure that documents complies all local regulatory requirements;

ii. The screening of new parties involved against current applicable lists sanction lists;

iii. The extent to which the documents presented comply with the information already

checked in the LC;

iv. Check & ensure that documents presented constitute complying presentation, i.e.,

documents are presented as per LC terms, UCP 600 & ISBP;

v. Check the known red flag indicators of TBML/FT such as:

� Whether the size of the shipment appears inconsistent with the scale of the Importer’s

regular business activities

� Whether shipment is made prior to the LC issuing date;

� Whether bill of exchange value differs with the commercial invoice;

� Whether documents contain so many corrections;

� Whether the transaction involves the use of repeatedly amended or frequently extended

LC without reasonable justification;



� Whether significant discrepancies appear between the descriptions of the goods on the

transport document (i.e., bill of lading) and the invoice, or other documents (i.e.,

certificate of origin, packing list, etc.);

� Whether Shipment locations or description of goods is inconsistent with the letter of

credit;

� Whether Packaging is inconsistent with commodity or shipping method;

� Whether the shipment does not make economic senses (e.g. the use of a forty-foot

container to transport a small amount of relatively low value merchandise;

� Whether the transaction involves the use of front or shell companies;

� Whether unusual shipping routes or trans-shipment points are used;

� Whether Port of Loading, transit or transshipment points, Port of Discharge, vessel name,

carrier, master and/or any other party appearing in the BL or any other new name

appearing in any other document are properly checked in the sanction list of UNSCR,

OFAC & BFIU;

� Whether phantom/less shipment is made against LC;

� Whether any duplication of payment has been identified/ received.


i. Make further internal & external enquiries as to the appropriate course of action;

ii. Request more information from Importer as well as supplier’s bank before agreeing to

proceed with the document lodgment, retirement & payment;



iv. Refuse & return the documents if enquiries do not provide reasonable explanations and

submit a suspicious transaction/activity report to CCU, Head Office & update the

Bangladesh Bank import monitoring system accordingly.

7.5.3.5 Assessment and Evaluation of Import Payment

a. Appropriate reviewing should be conducted by AD branches or authorized Head Office Division in

relation to make payments to importer’s bank or other entities as per instruction of importer’s

against the Letter of Credit or LCAF which may take account of the following:

i. Check & confirm that payment is made from importer’s account;

ii. Screen the names in the payment instruction, including the names of any new banks;

7.5.3.6 Assessment and Evaluation of Custom’s Certified Invoice or Bill of Entry


relation to payments made against the Letter of Credit or LCAF which may take account of the

following:

i. Whether documentation showing a higher or lower value or cost of merchandise

than that which was declared to Customs or paid by the importer (i.e. commodity

over-valuation or undervaluation;



ii. Whether significant discrepancies appear between the descriptions of the goods on

the bill of lading (or invoice) and the actual goods shipped as per Bill of Entry;

iii. If any mismatch or discrepancy is found, it is immediately required to inform the

Bangladesh and submit a suspicious transaction/activity report to CCU, Head Office.

7.6 Specific CDD Measures for Export Business

7.6.1 KYC Policy & Procedures

a. In addition to existing approval process for inducting any new export customer in our bank,

Branches or Authorized Subsidiaries or concerned Head Office Divisions are required comply the

generalized customer acceptance policy of this guidelines as specified in the paragraphs 4.3.1 to

4.3.2.18.

b. Branches or authorized subsidiaries or concerned Head Office Divisions are required to collect or

ensure the collection of complete & accurate KYC information of the export customers before or

during executing any export related international and/or local trade transaction in favor of their

customers or offering any export related trade finance and trade service facility to their

customers as specified in the paragraph 5.1.1 of this guidelines.



addition to paragraph 5.1.1 up to their satisfaction which are required to conduct appropriate

due diligence considering the risk of the customer in the light of existing directions. Such

additional information may be related to:

i. The countries with which the exporter trades/exports;

ii. The goods they trade/export/produce;

iii. Marketability & demand of the goods in local/global market;

iv. Production capacity, if applicable;

v. Yearly/half yearly/monthly sale or consumption of imported raw-materials by the

exporter;

vi. The role & location of the parties with whom the exporter does business (e.g. buyers,

suppliers, etc.);

vii. The role & location of the agents and other third parties used by the foreign

importer/buyer in relation to the business;

viii. The role & location of the agents and other third parties used by the exporter in

relation to the business;

ix. previous export performance; and

x. any other required information up to satisfaction of the branch or authorized

subsidiary or concerned Head Office Divisions.

7.6.2 Collection & Verification of Export Related Documents

a. In addition to the documents collected for identification & verification of the

exporter/customer as specified in the paragraphs 5.8.1.1 to 5.8.8.3 of chapter four of this

guidelines, branches or authorized subsidiaries or concerned Head Office are required to

collect the following applicable documents and verify the same using reliable, independent

source, documents or data before executing any export transaction.

i. Trade Licence;

ii. Export Registration Certificate (E.R.C);

iii. Import Registration Certificate (I.R.C), if applicable;



iv. VAT Certificate, if applicable;

v. TIN Certificate, if applicable;

vi. EPB Enrolment Certificate, if applicable;

vii. Environment Certificate, if applicable;

viii. Fire license, if applicable;

ix. License from labor directorate, if applicable;

x. Factory Layout Plan Approval, if applicable;

xi. Permission from Ministry of Textile, if applicable;

xii. Registration and recommendation issued by Board of Investment, if applicable;

xiii. Production capacity of the factory, if applicable;

xiv. List of Machinery with commercial invoice, if applicable;

xv. Boiler Certificate, if applicable;

xvi. Fire License, if applicable;

xvii. Bonded Warehouse License, if applicable;

xviii. Tenancy agreement copy, if applicable;

xix. Membership Certificate from recognized Chamber/Trade Association, if applicable;

xx. Membership & certification of Bangladesh Garments Manufactures & Exporters

Associate, if applicable;

xxi. Memorandum and Articles of Association and Certificate of Incorporation (in case of

Limited Company) , if applicable;

xxii. Certificate of commencement, if applicable;

xxiii. Resolution of the company stating financial assistance from Bank/ Branch, if applicable;

xxiv. Declaration Regarding Liability with Other Bank in Party's Letter Pad, if applicable;

xxv. Declaration of Assets & Liabilities of Director, if applicable;

xxvi. Any other required documents up to satisfaction of the AD branch or authorized

subsidiary or concerned Head Office Division.

7.6.3 Assessment & Evaluation of Export Documents

7.6.3.1 AD branches or authorized subsidiaries or concerned Head Office Divisions are required to review

and evaluate:

a. KYC information & documents received as specified in the paragraph 7.6.1 (a)(b)(c) of this

chapter;

b. Export LC/ Sales contracts & other documents received from exporter as per paragraph 7.6.2

of this chapter;

c. Export documents received from exporter; and

d. Export bills realization; Export bill of entry received from exporter.

7.6.3.2 Assessment and Evaluation of KYC Information Documents

a. AD branches or authorized subsidiaries or concerned Head Office Divisions are required to

review and evaluate KYC information and documents to find out the likelihood & impact of

the inherent risk, categorize the customer as low or high risk customers, apply CDD measures

as specified in the paragraph 5.4 of chapter four of this guidelines.

b. AD branches or authorized subsidiaries or concerned Head Office Divisions may required to

apply enhanced due diligence where:

i. Exporter falls into a higher risk category or where the nature of their trade/business

as disclosed during the standard due diligence process suggests that enhanced due

diligence would be prudent;



ii. The nature of business and the anticipated transactions as described and disclosed in

the initial due diligence stage may not necessarily suggest a higher risk category but

if, during the course of any transaction any high risk factors become apparent, this

may warrant additional due diligence;

iii. Transaction includes third parties (i.e. parties not associated with EXIM bank),

middlemen or traders using back to back or transferable LCs or payments from

offshore deals;

iv. Customer/exporter is a middle man or trader or agent of the buyer.

c. AD branches or authorized subsidiaries, if any or concerned Head Office Divisions may

consider the following where enhanced due diligence is required in addition to what specified

in the paragraph 4.6 of chapter four of this guidelines.

i. Identifying, understanding & verifying trade cycle of the exporter;

ii. Identifying, understanding & verifying the cross border customs & licensing

regulations;

iii. Identifying, understanding & verifying actual procurement or production capacity of

the exporter;

iv. Establishing physical control over the goods; and

v. Identifying & verifying of the payment flows.

7.6.3.3 Assessment and Evaluation of Export LC/Sales Contract Submitted by Exporter

a. Appropriate reviewing should be conducted by AD branches or authorized Head Office

Division in relation to the Letter of Credit application or import requests when received from

importer which takes account of the following:

i. Screen the Sanctions & terrorist lists (BIFU, OFAC & UNSC) which may affect:

� Directly, buyer as a named target;

� The country in which buyer is located;

� The goods involved;

� The country where the goods are trans-shipped and destination points;

� Other names appearing in the Export LC or sales contract.

ii. Check the countries which are rated as high risk for ML & FT in which:

� buyer or notify party or consignee or their bank is located;

� The transportation of goods occurs through those countries.

iii. The goods described in the transaction to check that:

� The type, quantity and value of goods is consistent with what is known business of

exporter & his/her production capacity;

� Price is competitive;

� There are no generally known embargoes other than those arising from sanctions

(local law and UNSC sanctions).

iv. The buyer (importer) to check through collection of credit report that:



� On the face of it they are the kind of counterparty which is consistent with what is

known of the business of exporter.

v. Check the documents and be confirmed that the documents submitted by importer

comply:

� the Bangladesh Bank Guidelines for Foreign Exchange Transactions;

� circulars issued by Bangladesh Bank & BFIU;

� export policy in force;

� Foreign Exchange Regulation Act 1947; and

� other applicable acts, rules & regulations.

vi. Check and confirm that the importer has no overdue export bills or EXP Forms;

vii. Export L/C Workability with Exporter’s Bank:

� export L/C is available at the counter of the exporter’s bank;

� beneficiary can present documents under the export L/C, and

� it does not depend on any other factors.

viii. Checking Export LC terms for indicators of unusual aspects such as:

� Involve unrelated parties;

� Involve highly unorthodox documentation;

� Involve a complex structure obscuring the true nature of the transaction;

� Involve other parties which as a result of any screening activity bank regards as

unacceptably high risk;

� Create an unusual trigger point for the payment to be made under the LC/sales

contract (e.g. Goods are shipped without the need for presentation of

documents).


i. Make further internal enquiries as to the appropriate course of action;

ii. Request more information from Importer before agreeing to proceed with the

transaction;



iv. Decline the transaction if enquiries do not provide reasonable explanations and

submit a suspicious transaction/activity report to CCU, Head Office.

7.6.3.4 Assessment and Evaluation of Export Documents Submitted by Exporter

a. Appropriate reviewing should be conducted by AD branches or authorized Head Office

Division in relation to the documents received from exporter against the Export Letter of

Credit or Sales Contract which takes account of the following:

i. Check & ensure that documents complies all local regulatory requirements;



ii. The screening of new parties, is any, involved against current applicable lists sanction

lists;

iii. The extent to which the documents presented comply with the information already

checked in the LC;

iv. Check & ensure that documents presented constitute complying presentation, i.e.,

documents are presented as per Export LC terms, UCP 600 & ISBP;

v. Check the known red flag indicators of TBML/FT as specified in the paragraph 7.5.3.4(v)

of this chapter.


i. Make further internal & external enquiries as to the appropriate course of action;

ii. Request more information from exporter before agreeing to proceed with the

document lodgment & providing any post shipment finance;



iv. Refuse & return the documents and arrange to return the goods if enquiries do not

provide reasonable explanations and submit a suspicious transaction/activity report to

CCU, Head Office & update the Bangladesh Bank export monitoring system accordingly.

7.6.3.5 Assessment and Evaluation of Export Payment


relation to make payments to exporter or other entities as per instruction of exporter which may

take account of the following:

i. Check & confirm that full EXP value repatriated;

ii. Check & confirm that payment is made to exporter’s account;

iii. Screen the name of the person or entity and conduct appropriate CDD when export

payment is made to other than exporter.



CHAPTER 08

New Technologies: Islamic Investment Card, Debit Card, Pre-paid Card,

Mobile Banking, Internet Banking and Alterative Delivery Channels

8.1 New Technology Related Definitions

Automated Teller Machine (ATM) - an automated teller machine (ATM) is an electronic banking

outlet, which allows customers to complete basic transactions without the aid of a branch

representative or teller.

Cash Deposit Machine (CDM) - the Cash Deposit Machine (CDM) is a self-service terminal that

lets customers make deposits and payment transactions by cash & Cheque.

Call Center - a call center of a bank is a 24 hours one stop customer service point where

customers can get all banking information they need by a single phone call without going to

branch, waiting in cue or bothering for banking hours.

Islamic Investment Card - an islamic investment card is a plastic card issued by a financial

institution that allows its user to borrow pre-approved fund at the point of sale in order to

complete a purchase or withdraw cash from ATM or counter of the financial institute.

Debit Card - a debit card is a plastic card or money that provides alternative payment method

which deducts money directly from a consumer’s checking account for payment of a purchase or

withdrawal of cash.

Internet Banking – Internet banking is a system which allows customers to perform banking

activities any time any where through the internet.

Mobile banking – mobile banking is a package of mobile financial services provided by a bank or

other financial institution that allows its customers to conduct a range of financial transactions

remotely using a mobile device such as a mobile phone or tablet, and using software, usually

called an app, provided by the bank or financial institution for the purpose.

Mobile Financial Services – any bank in Bangladesh may offer following mobile financial services

to their customers (in broad categories) subject to approval from Bangladesh Bank:

� Disbursement of inward foreign remittances;

� Cash in /out using mobile account through agents/Bank branches/ ATMs/Mobile

Operator’s outlets;

� Person to Business Payments - e.g. utility bill payments, merchant payments;

� Business to Person Payments e.g. salary disbursement, dividend and refund

warrant payments, vendor payments, etc.;

� Government to Person Payments e.g. elderly allowances. Freedom-fighter

allowances, subsidies, etc.;

� Person to Government Payments e.g. tax, levy payments;

� Person to Person Payments (One registered mobile Account to another

registered mobile account); and

� Other payments like microfinance, overdrawn facility, insurance premium, DPS, etc.



Prepaid Card - a card issued by a financial institution is preloaded with funds and is used like a

normal credit card. A prepaid card works in the opposite way of a normal credit card, because

instead of buying something with borrowed funds (through credit), customers buy things with

funds that have already been paid.

Point of Sales (POS) - the point of sale (POS) is the time and place where a retail transaction is

completed. It is the point at which a customer makes a payment to the merchant in exchange for

goods or after provision of a service.

SMS Banking - Short Message Service (SMS) Banking is a service that allows customers to access

their account information via mobile phone.

8.2 New Technology Related Products and Services & Their Vulnerabilities

8.2.1 EXIM Islamic Investment Card

8.2.1.1 General Features

� Credit cards have a maximum amount or credit limit within which the user can borrow

during a given period.

� The credit limit is pre-determined by EXIM bank based on the cardholder's credit rating,

credit history and collateral security.

� A credit card may be local or international or both.

� Customer is required to open a bank account to avail an investment card.

� A local credit card can be used to over thousand of Merchants POS for purchase or

shopping all over Bangladesh.

� A local card holder can withdraw cash from EXIM bank, Q-Cash, NPSB or VISA branded

ATM booths.

� An international credit card holder has worldwide access to over 8.5 lac VISA ATMs for

cash withdrawal and over 2.5 crore VISA merchants for purchase/shopping in abroad.

� Card holder may pay his or her dues from his bank account or depositing cash to the card

number in the counter of the bank or through CDMs.

� SMS alert services are available for all kind of transactions.

� Card can be used for the payment of online transactions & E- Commerce transactions

� Credit card issuers require the cardholder to pay his or her balance in full, usually on a

monthly basis. If the user does not pay the balance in full, the issuer adds profit to the

balance.

� 24/7 call center service @ 16246, 09604016246.

8.2.1.2 Vulnerabilities

� Credit card gives access to cash, i.e., withdrawal of cash by the credit card holder or by

any third party through ATM, especially abroad, in multiple currencies increases the ML &

TF risk.



� Credit cards can also easily be passed on to anonymous third parties who in some cases

will be the beneficial owner or criminal which will increase the ML & TF risk.

� Card holder or its’ beneficiary owner or any unauthorized third party in connivance with

the merchant may execute transactions without delivering any underlying goods or

services which will widen the scope of money laundering & terrorist financing.

� Where additional “twin cards” or “partner cards” or “supplementary card” are issued

that are specifically designed and advertised for being passed on to third parties to use it,

these third parties/beneficial owners are often not identified properly.

� Anonymous funding or Cash funding/payment through distribution agents or third

parties or CMDs can increase ML/TF risk, especially where the distributing staff have no

CDD obligations and/or no sufficient training in AML/CFT compliance.

� The wider the geographical reach of a credit card, the higher the ML/TF risk will be. The

cross-border functionality of credit cards renders the service more attractive to money

launderers and terrorist financiers.

� Online use of the credit card may increase risk of ML/TF.

8.2.2 EXIM Cash (Mobile Banking)


� Mobile banking is usually available on a 24-hour basis.

� EXIM Bank mobile banking Customers can cash-in (deposit) at any Branch of EXIM bank.

� EXIM Bank mobile banking Customers can cash-out (withdraw) from any branch or ATM

of EXIM bank.

� Top Up option allows EXIM Bank mobile banking customers to recharge their own mobile

number or any other mobile number they want.

� EXIM Bank mobile banking customers can send/transfer money from one mobile banking

account to another mobile banking account.

� EXIM Bank mobile banking account holder can know about their Mobile Banking account

balance.

� Customers can pay utility bills of various organizations using mobile banking account.

� When a Customer buy/shop something from EXIM Bank authorized merchants they can

pay the bill to the merchant using their mobile banking account.


� Multiple accounts can be opened by criminals to hide the true value of deposits;

suspicious names cannot be flagged by system making it a safe-zone for known criminals

and terrorists; and allows for cashing out of illicit or terrorist-linked funds.



� Criminals can smurf proceeds of criminal activity into multiple accounts, can perform

multiple transactions to confuse the money trail and true origin of funds, and withdraw

Smurfed funds from multiple accounts at the same time.

� Illegal monies can be quickly deposited and transferred out to another account. Such

transactions occur in real time, making little time to stop it if there is any suspicion of

terrorist financing or laundering. Thus Criminal money can be moved through the system

rapidly and withdrawn from another account..

� Agents, intermediaries and retail partners, if any, occupy a sensitive position in the

payment cycle of mobile banking services such as the loading of cash payments, the point

of redemption or pay-out, etc. Such persons are therefore in a position to falsify records,

ignore suspicions that may otherwise be reported, or simply to be a point of weakness

where they do not perform their roles in a diligent manner.

� Merchants, if any, may provide a greater risk, as they can receive substantial volumes of

payments and extract these as the legitimate product of business (this can comprise

integration of funds). Merchants may be fraudulent themselves, defrauding their

customers, or may be fronts for the laundering of proceeds of crime from co-

conspirators, who can pose as consumers.

� Cross-border payments through mobile banking, if any, can enable criminal funds to be

moved from the jurisdiction where they are created to another where they may be used

to further crime, or to be extracted, or to be moved once again to another jurisdiction.

Thus widen the scope of ML/TF through mobile banking.

8.2.3 EXIM Debit Card


� Debit cards eliminate the need to carry cash or physical checks to make purchases or

withdraw cash.

� Debit cards, also called check cards, may offer the convenience of credit cards and many

of the same consumer protections when issued by major payment processors like Visa or

MasterCard.

� Unlike credit cards, they do not allow the user to go into debt, except perhaps for small

negative balances that might be incurred if the account holder has signed up for

overdraft coverage.

� Debit cards usually have daily purchase limits or withdrawal, meaning it may not be

possible to make an especially large purchase with a debit card.

� Card holders may also make balance enquiry or collect mini account statement through

debit card.


� Debit card gives access to cash, i.e., withdrawal of cash by the debit card holder or by

any third party through ATM, in home or abroad, in local currency or in multiple foreign

currencies increases the ML & TF risk.



� Debit cards can also easily be passed on to anonymous third parties who in some cases

will be the beneficial owner or criminals which will increase the ML & TF risk.

� Card holder or its’ beneficiary owner or any unauthorized third party in connivance with

the merchant may execute transactions without delivering any underlying goods or

services which will widen the scope of money laundering & terrorist financing.

� The wider the geographical reach of a debit card, the higher the ML/TF risk will be. The

cross-border functionality of debit cards renders the service more attractive to money



8.2.4 EXIM Pre-paid Card (EXIM Hajj/ Travel Card/ Remittance Card/Gift Card)


� A prepaid card may be local or international or both.

� Customers do not require opening a bank account to purchase a prepaid card.

� A local prepaid card can be used to over thousand of Merchants POS for purchase or

shopping all over Bangladesh.

� A local card holder can withdraw cash from EXIM bank, Q-Cash or VISA branded ATM

booths.

� An international prepaid card holder has worldwide access to over 8.5 lac VISA ATMs for

cash withdrawal and over 2.5 crore VISA merchants for purchase/shopping in abroad.

� Prepaid card can be upload from any EXIM branch with unlimited amount (Int’l part may

load as per Bangladesh Bank Travel/Hajj quota guideline).

� Card holder can check the card balance or view the mini statement from any EXIM or Q-

cash ATM booth.

� SMS alert services are available for all kind of transactions.

� Card can be used for the payment of online transactions & E- Commerce transactions


� Ability of a prepaid card to access cash, i.e., withdrawal of cash by the prepaid card

holder, in home or abroad, in local currency or multiple foreign currencies increases the

ML & TF risk.

� Prepaid cards can also easily be passed on to anonymous third parties who in some cases

will be the beneficial owner or criminal which will increase the ML & TF risk.

� Anonymous funding/reloading or Cash funding/reloading through distribution agents or

third parties or CDMs can increase ML/TF risk, especially where the distributing staffs

have no CDD obligations and/or no sufficient training in AML/CFT compliance.



� The wider the geographical reach of a prepaid card, the higher the ML/TF risk will be. The

cross-border functionality of prepaid cards renders the service more attractive to money



8.2.5 Automated Teller Machine (ATM)


� Customers are required to insert a plastic ATM card with magnetic stripe or a plastic

smart card with a chip that contains unique card number and some security information

such as expiration date or CVC.

� Security is provided by the customer entering a personal identification number (PIN).

� Customers can withdraw cash from their accounts through ATMs .They usually have two

withdrawal options:

o Fast cash – allows to quick withdrawal a set amount as labeled on the machine;

and

o Normal withdrawal – allows withdrawing customized amount as per requirement

of the customer.

� It allows the customer to transfer money to their other accounts or accounts of other

individuals within the bank.

� It also allows the customers to check their account balances & print recent transaction

lists.


� ATMs give customer or any third party access to cash, i.e., allows withdrawal of cash,

especially abroad, in multiple currencies which increases the ML & TF risk.

� ATM network provides wider geographical reach to a card user and thereby giving the

higher scope of the ML/TF.

� Criminals may capture card information using different fraudulent methods such using

skimming devices, theft, PIN frauds, etc. , withdraw money from the customers’ account

using ATMs and use the same for criminal purposes.

8.2.6 Cash Deposit Machine (CDM)


� Conventionally, depositing cash into customer’s bank account can be a tedious affair as it

has to be done within the banking hours and customers have to fill up a deposit slip and

stand in a queue. CDM makes the cash deposit process more flexible and convenient

without the assistance of banking personnel from selected locations 24 hours 7 days

basis.



� It’s a self operating system and requires no operator to operate the machine. The

machine has its own system that guide and instruct how to deposit bills.

� Anyone can avail this service, doesn’t matter whether he/she is EXIM BANK customer.

� It’s an automated electronic system. Cash, Card Payment & Utility bills can be paid

through Automated EXIM CDM.

� Customer or any other third party does not require paying any fee to avail CDM service.

� CDM is a fully automated and secured system. No one can take out any bills from this

machine as the vault of this machine has digital & manual lock.


� Anonymous deposits or deposits by non-verified third parties to any account through

CDMs increase the risk of ML/TF.

� Anonymous or non-verified funding/reloading of prepaid cards & credit cards by third

partied through CDMs can increase ML/TF risk.

� The wider the geographical reach of CDM services, the higher the ML/TF risk will be.

8.2.7 Point of Sale (POS)


� It is the point where customers make payment to the merchant in exchange for goods or

services.

� The POS system can include the ability to record and track customer orders, process

credit and debit cards, connect to other systems in a network, and manage inventory.

� It may be real, as in the case of a chain store, or virtual, as in the case of an electronic

retailer that sells goods and services over the phone or on the Internet.

� At the point of sale, the merchant would prepare an invoice for the customer (which may

be a cash register printout) or otherwise calculate the amount owed by the customer and

provide options for the customer to make payment through credit/debit/prepaid cards.

� After receiving payment, the merchant will also normally issue a receipt for the

transaction. Usually the receipt is printed, but it is increasingly being dispensed

electronically.

� Merchants close the transactions at the end of the day and receive payment from EXIM

bank in the next morning.


� Merchants may provide a greater risk, as they can receive substantial volumes of

payments and extract these as the legitimate product of business (this can comprise

integration of funds).



� Merchants may be fraudulent themselves, defrauding their customers, or may be fronts

for the laundering of proceeds of crime from co-conspirators, who can pose as

consumers.

� The wider the geographical reach of POS services, the higher the ML/TF risk will be.

8.2.8 AISER (Internet Banking)


� EXIM Bank has second generation of internet banking known as AISER having

transactional facility from 8th

January, 2015 through T24 Software since December 15,

2014.

� An approved AISER user can transfer funds to his/her another account in EXIM bank, any

other beneficiary account in EXIM bank and/or any other beneficiary account in any bank

in Bangladesh through BEFTN in anytime from anywhere.

� She/he may pay the utility bills, recharge mobile balance, pay EXIM Islamic VISA Card bills

and give positive pay instruction (real time integration with BACH system) through AISER.

� She/he may get real time balance inquiry, real time deposit information, real time

transaction search and real time account statement through AISER.


� The unregulated nature of the Internet is attractive to criminals, opening up alternative

possibilities for money laundering, terrorist financing and fraud.

� Cyber criminals or hackers may use the internet banking facilities for online bank

information theft, identity theft, online predatory crimes and unauthorized computer

access

8.2.9 SMS Banking


� An EXIM bank customer authorized for SMS banking may get following SMS services

(push) without any request:

o Debit Card/ATM Transaction; and

o Cash transaction (Withdrawal or Deposit) greater than or equal to Tk. 5,000/-

� An EXIM bank customer authorized for SMS banking may get following SMS services (pull)

upon request:

o Balance Inquiry,

o Mini Statement,

o Transaction History/ Mini Statement (Last 5), and

o A/C Information

� An EXIM bank customer authorized for SMS banking may also get following SMS services

(push & pull):

o Multiple Account Registration,

o Welcome SMS for opening new account,

o EID greetings and New year greetings,

o Notification of new product / services,

o Special SMS from management,



o Notification of New branch opening or shifting branch location,

o Confirmation alert for newly registration, and

o Activation/deactivation under Banking Services


� Delivery of customers’ financial information to non-verified mobile number of

unauthorized persons or third parties may be used for money laundering & terrorist

financing

8.2.10 Call Center


� EXIM bank Call center Services are available on 24 hours 7 days .

� It is equipped with a special networking system where 30 customers can call concurrently

and get their desired service.

� Call Center is a one stop service solution for all banking queries of customers.

� Customers can call at the call center with various types of queries related to account,

transactions, products & services of EXIM bank, documentation procedures, complains,

etc. and which are resolved over phone instantly or some of requests/ services are

execute through mail or outbound call after proper verification.

� All type of cards are activated and de-activated through Call Center Service after

receiving acknowledgement slip and after proper verification through inbound and

outbound call.

� Call Center also receives mail from various ends and are executed and informed over the

mail as well.

� E-commerce transaction (i.e. online purchases, payments etc.) requests are received over

mail and are executed with valid documents as per customer requirement.

� Call center monitors the transactions of all cards, ATMs, CDMs, POS, AISER, EXIM Cash

and SMS banking, and takes appropriate actions.


� Delivery of customers’ financial information to unauthorized persons or third parties may

be used for money laundering & terrorist financing;

� Activation of cards without proper identification and verification of customers and/or

documents may lead to money laundering and terrorist financing through cards;

� Execution of online/internet banking transactions and e-commerce transactions without

proper identification & verification of customers and/or documents and/or transactions

may facilitate money laundering & terrorist financing.



8.3 General CDD Requirements

8.3.1 The requirements under this chapter are applicable to all existing products, services & delivery

channels and/or all products, services & delivery channels to be offered and/or any relationships

or transactions to be made or done by Credit Card Division, Alternative Delivery Channel Division,

Mobile Banking Division and any Branch or Head Office Division of EXIM Bank which are related

to new technologies such as Credit Card, Debit Card, Pre-paid Card, EXIM cash, ATMs, POS, CDMs,

AISER, etc.

8.3.2 Where relevant, references to a “customer” in this chapter include users of new technologies

such as Credit Card, Debit Card, Pre-paid Card, EXIM cash, ATMs, POS, CDMs, AISER, etc. of EXIM

Bank, merchants, agents, authorized persons or entities and/or beneficiary owners and/or any

other related person or entity.


appropriate CDD measures as specified in the Chapter Five (Customer Due Diligence) of this

guidelines before or during establishing relationship with the customer or executing any

transaction related new technologies such as Credit Card, Debit Card, Pre-paid Card, EXIM cash,

ATMs, POS, CDMs, AISER, etc.

8.3.4 In case of higher risk scenario as mentioned in the paragraphs 2.10(a)(b)(c) of Chapter Two (RBA)

and/or similar situations, branch or authorized subsidiary or concerned Head Office Divisions

must conduct applicable appropriate enhanced due diligence (EDD) measures as specified in the

paragraph 5.6 of chapter four (Customer Due Diligence) of this guidelines before or during

establishing relationship with the customer or executing any transaction related new

technologies such as Credit Card, Debit Card, Pre-paid Card, EXIM cash, ATMs, POS, CDMs, AISER,

etc.

8.3.5 Branch or Authorized Subsidiary or concerned Head Office Division shall not establish any

relationship with the customer or executing any transaction related new technologies such as

Credit Card, Debit Card, Pre-paid Card, EXIM cash, ATMs, POS, CDMs, AISER, etc. if the customer

does not comply with the requirements specified in this Chapter.



Foreign Exchange Regulation Act 1947 & other applicable acts, rules & regulations for executing

any transaction related to new technologies such as Credit Card, Debit Card, Pre-paid Card, EXIM

cash, ATMs, POS, CDMs, AISER, etc. in favor of their customers or offering any such product or

services to their customers.


screen/check the names appearing in the transactions, contracts and/or presented documents,

related to new technologies such as Credit Card, Debit Card, Pre-paid Card, EXIM cash, ATMs,

POS, CDMs, AISER, etc. against the names in the Targeted Financial Sanctions databases of UNSC,

OFAC & BFIU. If there is any name match, it is required to take reasonable and appropriate

measures to verify and confirm the identity of name(s) match. Once confirmation has been

obtained about the true matching, branches or authorized subsidiaries or concerned Head Office

Divisions must immediately stop the transaction and report it to CCU so that CCU can report it to

BFIU within next working day.

8.3.8 Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts as specified in the chapter nine of this guidelines and generate STR



report whenever there is any unusual or suspicious transactions as specified in the chapter

eleven of this guidelines.

8.3.9 Branch or Subsidiary or concerned Head Office Division is required to maintain all information &

documents related to CDD, EDD (if any), sanctions screening, transactions, etc. in accordance

with record keeping requirements under Chapter twelve.



the customer has been first established and CDD measures have duly been conducted as

specified in the chapter four of this guidelines.

8.4 Specific CDD Measures for Products & Delivery Channels

8.4.1 EXIM Islamic Investment Card

a. Branches or authorized subsidiaries or concerned Head Office Divisions must collect KYC &


b. Branches or authorized subsidiaries or concerned Head Office Divisions must assess the risk,

categorize the customer and apply CDD measures as specified in the paragraph 5.4 of chapter

four of this guidelines.

c. If the customer is categorized as high risk account, branches or authorized subsidiaries or

concerned Head Office Divisions must apply enhanced due diligence as specified in the


d. Branches or authorized subsidiaries or concerned Head Office Divisions shall conduct specific

CDD measures on customer, authorized person(s) or professional representative, if any, and

beneficiary owner(s) as specified in the paragraphs 5.8.1 to 5.8.9 of this guidelines;

e. Branches or authorized subsidiaries or concerned Head Office Divisions shall also conduct

specific CDD measures on agents, distributors, merchants or any other third party(s) related

to delivery of card related customer services, if any, as specified in the paragraphs 5.8.1 to

5.8.9 of this guidelines;

f. Branches or authorized subsidiaries or concerned Head Office Divisions shall set limits such as

card limit, maximum number of transactions limit per day, maximum amount limit per

transaction, maximum cumulative amount per day, maximum purchase/shopping limit per

transaction, maximum cumulative purchase/shopping limit per day, maximum cash

withdrawal limit per transaction, maximum cumulative cash withdrawal limit per day,

maximum transaction limit per merchant, geographic limit, etc. considering functionality of

card, ML/TF risks, the circulars of the Department of Currency Management & Payment

Systems Department of Bangladesh Bank, and Bangladesh Bank other circulars & Guidelines

for Foreign Exchange Transactions in addition to their other existing considerations.


measures to establish the source of fund of the customer as specified in the paragraph 5.8.9

of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions shall take reasonable

measures to collect source of fund and complete & accurate information of the third party in



case of cash or anonymous repayment by the third party other than card holder as specified

in the paragraph 5.8.13 of this guidelines.

i. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of

high risk accounts and apply applicable ongoing CDD measures as specified in the paragraph


j. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts in a regular basis as specified in the chapter ten of this


as specified in the chapter twelve of this guidelines.

k. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that

agents, distributors, merchants or any other third party(s) related to delivery of card related

services, if any, have their own AML/CFT programs and monitor their CDD compliances.

l. Branches or authorized subsidiaries or concerned Head Office Divisions must comply the

Bangladesh Bank Guidelines for Foreign Exchange Transactions; circulars issued by

Bangladesh Bank & BFIU, Foreign Exchange Regulation Act 1947 & other applicable acts, rules

& regulations.

8.4.2 EXIM Cash (Mobile Banking)


other information of the customer as per DCMPS(PSD) circular letter no.11 dated 20-12-2011

including any amendment through subsequent circulars of Bangladesh Bank.


categorize the customer and apply CDD measures as specified in the paragraph 5.4 of chapter

four of this guidelines.





CDD measures on customer, authorized person(s) , if any, and beneficiary owner(s) as

specified in the paragraphs 5.8.1 to 5.8.9 of this guidelines;



to delivery of EXIM cash related customer services, if any, as specified in the paragraphs 5.8.1

to 5.8.9 of this guidelines;

f. Branches or authorized subsidiaries or concerned Head Office Divisions shall set maximum

amount that can be held in a EXIM cash (mobile banking account), the maximum amount

allowed per single transaction, including cash withdrawals, the frequency or cumulative value

of transactions and cash withdrawals permitted per day/week /month/ year considering

ML/TF risks, and the circulars of the Department of Currency Management & Payment

Systems Department of Bangladesh Bank in addition to their other existing considerations.




measures to establish the source of fund of the customer as specified in the paragraph 5.8.9

of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of

high risk accounts and apply applicable ongoing CDD measures as specified in the Paragraph


i. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the

transactions of such accounts in a regular basis as specified in the Chapter Ten of this


as specified in the Chapter Twelve of this guidelines.

j. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that



k. Branches or authorized subsidiaries or concerned Head Office Divisions must comply the

Bangladesh Bank Guidelines on Mobile Financial Services (MFS) for the Banks; circulars issued

by Department of Currency Management & Payment Systems Department of Bangladesh

Bank & BFIU & other applicable acts, rules , regulations , guidelines & circulars.

8.4.3 Debit Card


other information of the customer or ensure that KYC & other information of the customer

have been collected as per paragraph 5.1.1 of this guidelines.


categorize the customer and apply CDD measures or ensure that risks are assessed, customer

is categorized for applicable CDD measures as specified in the Paragraph 5.4 of Chapter Five

of this guidelines.


concerned Head Office Divisions must ensure that enhanced due diligence applied as

specified in the Paragraph 5.6 of this guidelines.

d. Branches or authorized subsidiaries or concerned Head Office Divisions shall ensure that

specific CDD measures on customer, authorized person(s) or professional representative, if

any, and beneficiary owner(s) have been conducted as specified in the Paragraphs 5.8.1 to




to delivery of card related customer services, if any, as specified in the Paragraphs 5.8.1 to














measures to establish the source of fund of the customer as specified in the Paragraph 5.8.9

of this guidelines.



case of cash or anonymous funding by the third party other than card holder as specified in

the Paragraph 5.8.13 of this guidelines.











l. Branches or authorized subsidiaries or concerned Head Office Divisions must comply, if

applicable, the Bangladesh Bank Guidelines for Foreign Exchange Transactions; circulars

issued by Bangladesh Bank & BFIU, Foreign Exchange Regulation Act 1947 & other applicable

acts, rules & regulations.

8.4.4 EXIM Haij/Prepaid/Travel/Remittance/Gift Card




categorize the customer and apply CDD measures as specified in the Paragraph 5.4 of

Chapter Five of this guidelines.



Paragraph 5.6 of this guidelines.


CDD measures on customer, authorized person(s) or professional representative, if any, and

beneficiary owner(s) as specified in the Paragraphs 5.8.1 to 5.8.9 of this guidelines;



to delivery of card related customer services, if any, as specified in the Paragraphs 5.8.1 to














measures to establish the source of fund of the customer as specified in the Paragraph 5.8.9

of this guidelines.



case of cash or anonymous loading/reloading by the third party other than card holder as

specified in the Paragraph 5.8.13 of this guidelines.











l. Branches or authorized subsidiaries or concerned Head Office Divisions must comply the

Bangladesh Bank Guidelines for Foreign Exchange Transactions; circulars issued by

Bangladesh Bank & BFIU, Foreign Exchange Regulation Act 1947 & other applicable acts, rules

& regulations.

8.4.5 Automated Teller Machine (ATM)

a. Branches or authorized subsidiaries or concerned Head Office Divisions shall set ATM withdrawal limits by cards such as maximum number of transactions limit per day,

maximum amount limit per transaction, maximum cumulative amount per day, etc.

considering functionality of card, ML/TF risks, the circulars of the Department of Currency

Management & Payment Systems Department of Bangladesh Bank, and Bangladesh Bank

other circulars & Guidelines for Foreign Exchange Transactions in addition to their other

existing considerations.

b. Branches or authorized subsidiaries or concerned Head Office Divisions shall install high

quality digital color cameras in the ATM booth and preserve the footage as per circulars of

the Department of Currency Management & Payment Systems Department of Bangladesh

Bank, and EXIM bank.



c. Branches or authorized subsidiaries or concerned Head Office Divisions shall take all

precautionary measures as required by the circulars of the Department of Currency

Management & Payment Systems Department of Bangladesh Bank, and EXIM bank to ensure

the security of the ATM booths and protect the ATM booths from fraud & forgery by

criminals.

d. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that

agents, distributors, merchants or any other third party(s) related to delivery of ATM related


e. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that the

transactions of the ATMs are monitored by our call center on 24 hours 7 days basis for

preventing misuse by the criminals in addition to as specified in the Chapter Ten of this

guidelines, and generate STR report whenever there is any unusual or suspicious transactions


8.4.6 Cash Deposit Machine (CDM)

a. If the depositor in CDM transaction is other than the account holder or card holder, branches

or authorized subsidiaries or concerned Head Office Divisions are required to collect &

preserve the complete & accurate information of the depositor, and source of fund as

specified in the Paragraph 5.8.13 of Chapter five of this Guidelines.

b. Branches or authorized subsidiaries or concerned Head Office Divisions shall install high

quality digital color cameras in the CDM booth and preserve the footage as per circulars of

the Department of Currency Management & Payment Systems Department of Bangladesh

Bank, and EXIM bank.



Management & Payment Systems Department of Bangladesh Bank, and EXIM bank to ensure

the security of the CDM booths and protect the CDM booths from fraud & forgery by

criminals.

d. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that the

transactions of the CDMs are monitored by our call center on 24 hours 7 days basis for

preventing misuse by the criminals in addition to as specified in the Chapter Ten of this

guidelines, and generate STR report whenever there is any unusual or suspicious transactions

as specified in the Chapter Twelve of this guidelines

8.4.7 Point of Sale (POS)


other information of the merchant or ensure that KYC & other information of the merchant

have been collected as per paragraph 4.1.1 of this guidelines.


categorize the merchant and apply CDD measures or ensure that risks are assessed, merchant

(customer) is categorized for applicable CDD measures as specified in the Paragraph 5.4 of

Chapter Five of this guidelines.



c. If the merchant (customer) is categorized as high risk account, branches or authorized

subsidiaries or concerned Head Office Divisions must ensure that enhanced due diligence

applied as specified in the Paragraph 5.6 of this guidelines.

d. Branches or authorized subsidiaries or concerned Head Office Divisions shall ensure that

specific CDD measures on customer, authorized person(s) or professional representative, if

any, and beneficiary owner(s) have been conducted as specified in the Paragraphs 5.8.1 to


e. Branches or authorized subsidiaries or concerned Head Office Divisions shall set limits such as

merchant limit, maximum number of transactions limit per day, maximum amount limit per

transaction, maximum cumulative amount per day, geographic limit, etc. considering

functionality of POS, ML/TF risks, the circulars of the Department of Currency Management &

Payment Systems Department of Bangladesh Bank, and Bangladesh Bank other circulars &

Guidelines for Foreign Exchange Transactions in addition to their other existing

considerations.

f. Branches or authorized subsidiaries or concerned Head Office Divisions shall take reasonable

measures to establish the source of fund of the merchant (customer) as specified in the

Paragraph 5.8.9 of this guidelines.

g. Branches or authorized subsidiaries or concerned Head Office Divisions must make a list of

high risk merchant accounts and apply applicable ongoing CDD measures as specified in the

Paragraph 5.5 of this guidelines.

h. Branches or authorized subsidiaries or concerned Head Office Divisions must monitor the




i. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that

agents, distributors or any other third party(s) related to delivery of POS related services, if

any, have their own AML/CFT programs and monitor their CDD compliances.

j. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that the

transactions of the POS are monitored by our call center on 24 hours 7 days basis for

preventing fraudulent transactions, split transactions, etc. by the merchants in addition to as

specified in the Chapter Ten of this guidelines, and generate STR report whenever there is

any unusual or suspicious transactions as specified in the Chapter Twelve of this guidelines.

k. Branches or authorized subsidiaries or concerned Head Office Divisions must comply, if

applicable, the Bangladesh Bank Guidelines for Foreign Exchange Transactions; circulars

issued by Bangladesh Bank & BFIU, Foreign Exchange Regulation Act 1947 & other applicable

acts, rules & regulations.

8.4.8 AISER (Internet Banking)

a. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that KYC

& CDD of the customer have duly been completed, and information & document there

against are duly preserved as specified in this guidelines & BFIU before authorizing the

customer to use AISER facilities of the bank.



b. Branches or authorized subsidiaries or concerned Head Office Divisions shall take all


Management & Payment Systems Department of Bangladesh Bank, BFIU and EXIM bank to

prevent the misuse the AISER facilities by the authorized users.



Management & Payment Systems Department of Bangladesh Bank, BFIU and EXIM bank to

ensure the security of the internet banking, protect the bank system from cyber attacks such

as malware attacks, phishing attacks, pharming attacks, etc. and save the bank from financial

losses.

d. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that

agents, vendors or any other third party(s) related to delivery of AISER related services, if any,

have their own AML/CFT programs and monitor their CDD compliances.

e. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that the

transactions through AISER are monitored by our call center or IT Division on 24 hours 7

days basis for preventing fraudulent transactions, split transactions, unauthorized

transactions, cyber attacks etc. by the authorized users and/or any outsiders in addition to as

specified in the Chapter Ten of this guidelines, and generate STR report whenever there is

any unusual or suspicious transactions as specified in the Chapter Twelve of this guidelines.

8.4.9 SMS Banking

a. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that KYC

& CDD of the customer have duly been completed, and information & document there

against are duly preserved as specified in this guidelines & BFIU before authorizing the

customer to use /get SMS banking facilities of the bank.

b. Branches or authorized subsidiaries or concerned Head Office Divisions must identify & verify

the mobile number of customer to be used for SMS banking for ensuring that biometric

registration of mobile number is completed in the name of the customer.

c. Branches or authorized subsidiaries or concerned Head Office Divisions should ensure that

agents, vendors or any other third party(s) related to delivery of SMS banking related


8.4.10 Call Center

a. Branches or authorized subsidiaries or concerned Head Office Divisions shall identify and

verify the customer before delivering any call center related services so that financial

information of the customer cannot go to any unauthorized person or third party;

b. Branches or authorized subsidiaries or concerned Head Office Divisions shall ensure that all

types of card and/or card related services are activated by the call center after collecting &

verifying the required documents as per the Bangladesh Bank Guidelines for Foreign

Exchange Transactions; circulars issued by Bangladesh Bank, BFIU & EXIM bank, Foreign

Exchange Regulation Act 1947 & other applicable acts, rules & regulations.



c. Branches or authorized subsidiaries or concerned Head Office Divisions shall ensure that all

types of online/internet banking transactions and/or e-commerce transactions are activated

by the call center after collecting & verifying the required documents as per the Bangladesh

Bank Guidelines for Foreign Exchange Transactions; circulars issued by Bangladesh Bank, BFIU

& EXIM bank, Foreign Exchange Regulation Act 1947 & other applicable acts, rules &

regulations.

d. Branches or authorized subsidiaries or concerned Head Office Divisions must ensure that the

transactions through/of ATMs, CDMs, all types of cards, POS, EXIM cash, SMS banking and

AISER are monitored by our call center or IT Division on 24 hours 7 days basis for preventing

fraudulent transactions, split transactions, unauthorized transactions, cyber attacks etc. by

the authorized users and/or any outsiders in addition to as specified in the Chapter Ten of

this guidelines, and generate STR report whenever there is any unusual or suspicious

transactions as specified in the Chapter Twelve of this guidelines.



CHAPTER 09

Terrorist Financing and Proliferation Financing

9.1 Legal Obligations

Obligations under

ATA, 2009

Every Bank should take necessary measures, with appropriate caution and

responsibility, to prevent and identify financial transactions through which it is

connected to any offence under ATA, 2009 and if any suspicious transaction is

identified, the agency shall spontaneously report it to Bangladesh Bank

without any delay.

The Board of Directors, or in the absence of the Board of Directors, the Chief

Executive, by whatever name called, of each bank should approve and issue

directions regarding the duties of its officers, and shall ascertain whether the

directions issued by Bangladesh Bank under section 15 of ATA, 2009; which are

applicable to the bank, have been complied with or not.

9.2 Obligations under Circular

Obligations under

BFIU Circular-10;

dated 28/12/2014

Every bank shall establish a procedure by approval of Board of Directors for

detection and prevention of financing of terrorism and financing of

proliferation of weapons of mass destruction, shall issue instructions about the

duties of Bank officials, review those instruction time to time and ensure that

they are complying with the instructions issued by BFIU.

Before any international business transaction, every bank will review the

transaction to identify whether the concerned parties of that transactions are

individual or entity of the listed individual or entity of any resolution of United

Nation Security Council or listed or proscribed by Bangladesh government.

Immediately after the identification of any account of any listed individual or

entity concerned bank will stop that transaction and inform BFIU the detail

information at the following working day.

9.3 What is Terrorist Financing?

Terrorist financing can be simply defined as financial support, in any form, of terrorism or of those who

encourage, plan, or engage in terrorism. Financing of terrorism generally refers to carrying out

transactions involving funds that may or may not be owned by terrorist, or that have been, or are

intended to be, used to assist the commission of terrorism.

Financing of Terrorism includes:

� providing or collecting property for carrying out an act of terrorism;

� providing services for terrorism purposes;

� arranging for retention or control of terrorist property; or

� dealing with terrorist property.

The International Convention for the Suppression of the Financing of Terrorism (1999) under the United

Nations defines TF in the following manner:

a. 'If any person commits an offense by any means, directly or indirectly, unlawfully and willingly,

provides or collects funds with the intention that they should be used or in the knowledge that they

are to be used, in full or in part, in order to carry out:



i. An act which constitutes an offence within the scope of and as defined in one of the

treaties listed in the link given below; or

ii. Any other act intended to cause death or serious bodily injury to a civilian, or to any other

person not taking any active part in the hostilities in a situation of armed conflict, when the

purpose of such act, by its nature or context, is to intimidate a population, or to compel a

government or an international organization to do or to abstain from doing an act.

b. For an act to constitute an offense set forth in the preceding paragraph 1.1(a), it shall not be

necessary that the funds were actually used to carry out an offense referred to in said paragraph a,

subparagraph 1.1(a) (i) or 1.1(a)(ii).

9.4 Offences and Punishment relating to financing for terrorist activities

According to section 7 of ATA (Amendment) 2013:

i. If any person or entity knowingly supplies or expresses the intention to supply money,

service, material support or any other property to another person or entity and where there

are reasonable grounds to believe that the full or partial amount of the same have been used

or may be used for any purpose by an individual terrorist, terrorist entity or terrorist group or

terrorist organization then he or she or the said entity shall be treated committing the

offence of financing for terrorist activities.

ii. If any person or entity knowingly receives money, services, material support or any other

property from another person or entity and where there are reasonable grounds to believe

that full or partial amount of the same have been used or may be used for any purpose by an

individual terrorist, terrorist entity or terrorist group or terrorist organization, then he or she

or the said entity shall be treated committing the offence of financing for terrorist activities.

iii. If any person or entity knowingly makes arrangements for collecting money, services,

material support or any other property for another person or entity and where there are

reasonable grounds to believe that the full or the partial amount of the same have been used

or may be used for any purpose by an individual terrorist, terrorist entity or terrorist group or

terrorist organization then he or she or the said entity will be treated committing the offence

of financing for terrorist activities.

iv. If any person or entity knowingly instigate in such a manner, another person or entity to

supply, receive, or arrange money, services, material support or any other property and

where Manual on Prevention of Money Laundering and Combating Financing on Terrorism

there are reasonable grounds to believe that the full or the partial amount of the same have

been used or may be used for any purpose by an individual terrorist, terrorist entity or

terrorist group or terrorist organization then he or she or the said entity will be treated

committing the offence of financing for terrorist activities.

v. If any person is found guilty of any of the offences set out in the paragraphs 1.4(i) to 1.4(iv),

that person will be sentenced to imprisonment for a term between a maximum of twenty

and a minimum of four years, and in addition to this a fine may be imposed not less than the

greater of twice the value of the property involved with the offence or taka 10(ten) lac.

vi. If any entity is found guilty of any of the offences set out in the paragraphs 1.4(i) to 1.4(iv):



� steps may be taken under section 18 of ATA, 2009, and in addition to this, a fine

may be imposed not less than twice the value of the property involved with the

offence or taka 50(fifty) lac ; and

� The head of such entity, Chairman, Managing Director, Chief Executive Officer

whatever may be called by shall be punished with an imprisonment of a term up to

maximum of 20 and a minimum of 4 years and in addition to this a fine may be

imposed the greater of twice the value of the property involved with the offence or

taka 20(twenty) lac unless he is able to prove that the said offence was committed

without his knowledge or he had tried utmost to prevent the commission of the said

offence.

9.5 Powers of Bangladesh Bank

According to section 15 of ATA (Amendment) 2013:

a. Bangladesh Bank may take the necessary steps to prevent and identify any transactions

carried out through any reporting organization for the purpose of committing any offence

under this Act, and for this purpose, it will have the following powers and authority:

i. Call for a report relating to any suspicious transactions from any reporting

organization;

ii. Provide the reports received under paragraph 1.5(a)(i) to the respective law

enforcement agencies for taking necessary steps or, where applicable, provide it to

the foreign law enforcement agencies upon their request or, exchange information

relating to the report with the foreign law enforcement agencies;

iii. Collect and preserve of all statistics and records;

iv. Create and maintain a database containing the reports of all suspicious

transactions;

v. Analyze reports relating to suspicious transactions;

vi. If there are reasonable grounds to suspect that any transaction is connected to

terrorist activities issue an written order to the respective reporting organization to

suspend or freeze transactions in the relevant account for a period not exceeding

30(thirty) days. Such order may be extended for additional periods of 30 (thirty)

days up to a maximum of 6 (six) months, if it appears necessary to uncover correct

information relating to transactions of the account;

vii. Monitor and supervise the activities of reporting organizations;

viii. Give directions to reporting organizations to take preventive steps to combat the

financing for terrorist activities;

ix. Inspect reporting organizations for the purpose of identification of suspicious

transactions connected to financing for terrorist activities; and

x. Provide training to officers and employees of reporting organizations for the

purpose of identification and prevention of suspicious transactions connected to

financing for terrorist activities.

b. Bangladesh Bank, on identification of a reporting organization or its customer as being

involved in a suspicious transaction connected to financing for terrorist activities, shall inform

the same to the relevant law enforcement agency and provide all necessary cooperation to



the said law enforcement agency to facilitate their inquiries and investigations into the

matter.

c. In case of offences organized in other countries under trial, Bangladesh Bank shall take steps

to seize the accounts of any person or entity pursuant to any international, regional or

bilateral contract, UN conventions or respective resolutions of UN Security Council ratified by

the government.

d. The fund seized under paragraph 1.5 (C) shall be subject to disposal by the respective court

pursuant to the respective contracts, conventions or respective resolutions of UN Security

Council.

e. In order to perform the responsibilities set out in subsections 1.5(a) to 1.5(c), governmental,

semi-governmental, autonomous bodies shall provide requested information or in certain

cases spontaneously provide information to the Bangladesh Financial Intelligence Unit.

f. The Bangladesh Financial Intelligence Unit on demand or in certain cases spontaneously

provides information relating to terrorist activities or the financing for terrorist activities to

the Financial Intelligence Units of other countries.

g. For the purpose of investigation relating to financing for terrorism law enforcement agencies

shall have the right to access any document or file of any bank as per the following

conditions:

i. with an order from an appropriate court or tribunal;(

ii. with the approval of Bangladesh Bank.

9.6 Duties of Reporting Organizations

According to section 15 of ATA 2009:

a. Each reporting organization shall take necessary measures, exercising appropriate caution

and responsibility, to prevent and identify financial transactions through them connected to

any offence committed under this act and if any suspicious transaction is identified, shall

spontaneously report it to the Bangladesh Bank without any delay.

b. The Board of Directors, or in the absence of the Board of Directors the Chief Executive Officer

or whatever may be called by, of each reporting organization shall approve and issue

directions regarding the duties of its officers, and will ascertain whether the directions issued

by Bangladesh Bank under section 15, which are applicable to the reporting organizations,

have been complied with.

c. If any reporting organization fails to comply with the directions issued by Bangladesh Bank

under section 15 or knowingly provide any wrong information or false information or

statement, the said reporting organization shall be liable to pay a fine determined and

directed by Bangladesh Bank, not exceeding Taka 10 (ten) lacs and Bangladesh Bank may

suspend the registration or license with a purpose to close the operation of the said

agency/organization or any branch, service centre, booth or agent of that organization within



Bangladesh or where applicable, shall inform the registration/licensing authority about the

subject matter to take appropriate action against the organization.

d. If any Reporting Organization fails to pay any fine imposed by Bangladesh Bank under

paragraph 1.6(c), Bangladesh Bank may recover the amount from the reporting organizations

by debiting their accounts maintained in any bank or financial institution or Bangladesh Bank.

In this regard if any amount of the fine remains unrealized Bangladesh Bank may make an

application before the relevant court for recovery.

9.7 Necessity of Funds by Terrorist

Terrorist organizations need money to operate. Weapons and ammunition are expensive. Major

international operations require substantial investments for personnel, training, travel and

logistics. Organizations must have substantial fundraising operations, as well as mechanisms for

moving funds to the organization and later to terrorist operators. These functions entail

considerable risk of detection by authorities, but also pose major challenges to both the terrorists

and intelligence agencies.

9.8 Sources of Fund/Raising of Fund

In general, terrorist organizations may raise funds through: legitimate sources, including through

abuse of charitable entities or legitimate businesses and self-financing, criminal activity, state

sponsors and activities in failed states and other safe havens.

9.9 Movement of Terrorist Fund

There are three main methods to move money or transfer value. These are:

� the use of the financial system,

� the physical movement of money (for example, through the use of cash couriers) and

� the international trade system.

Often, terrorist organizations will abuse alternative remittance systems (ARS), charities, or other

captive entities to disguise their use of these three methods to transfer value. Terrorist

organizations use all three methods to maintain ongoing operation of the terrorist organization and

undertake specific terrorist activities.

9.9.1 Formal Financial Sector

Financial institutions and other regulated financial service providers' services and products

available through the formal financial sector serve as vehicles for moving funds that support

terrorist organizations and fund acts of terrorism. The speed and ease with which funds can be

moved within the international financial system allow terrorists to move funds efficiently and

effectively and often without detection between and within jurisdictions.

Combined with other mechanisms such as offshore corporate entities, formal financial

institutions can provide terrorists with the cover they need to conduct transactions and launder

proceeds of crime when such activity goes undetected.

9.9.2 Trade Sector

The international trade system is subject to a wide range of risks and vulnerabilities which

provide terrorist organizations the opportunity to transfer value and goods through seemingly



legitimate trade flows. To exploit the trade system for terrorist financing purposes could assist in

the development of measures to identify and combat such activity.

9.9.3 Cash Couriers

The physical movement of cash is one way terrorists can move funds without encountering the

AML/CFT safeguards established in financial institutions. It has been suggested that some groups

have converted cash into high-value and hard-to-trace commodities such as gold or precious

stones in order to move assets outside of the financial system. The movement of cash across the

borders is prevalent in the cash based economy and where the electronic banking system

remains embryonic or is little used by the populace.

Moving money using cash couriers may be expensive relative to wire transfers. As legitimate

financial institutions tighten their due diligence practices, it has become an attractive method of

transferring funds without leaving an audit trail. When cross border remittance of cash is

interdicted, the origin and the end use of cash can be unclear. Cash raised and moved for

terrorist purposes can be at very low levels – making detection and interdiction difficult.

9.9.4 Use of Alternative Remittance Systems (ARS)

Alternative remittance systems (ARS) are used by terrorist organizations for convenience and

access. ARS have the additional attraction of weaker and/or less opaque record-keeping and in

many locations may be subject to generally less stringent regulatory oversight. Although FATF

standards call for significantly strengthened controls over such service providers, the level of

anonymity and the rapidity that such systems offer have served to make them a favored

mechanism for terrorists.

9.9.5 Use of Charities and Non-Profit Organizations

Charities are attractive to terrorist networks as a means to move funds. Many thousands of

legitimate charitable organizations exist all over the world that serve the interests of all societies,

and often transmit funds to and from highly distressed parts of the globe. Terrorist abuses of the

charitable sector have included using legitimate transactions to disguise terrorist cash travelling

to the same destination; and broad exploitation of the charitable sector by charities affiliated

with terrorist organizations. The sheer volume of funds and other assets held by the charitable

sector means that the diversion of even a very small percentage of these funds to support

terrorism constitutes a grave problem.

9.10 Targeted Financial Sanctions (TFS)

9.10.1 Meaning of Targeted Financial Sanctions (TFS)

Targeted financial sanctions entail the use of financial instruments and institutions to apply

coercive pressure on transgressing parties—senior officials, elites who support them, or

members of non-governmental entities—in an effort to change or restrict their behavior.

Sanctions are targeted in the sense that they apply only to a subset of the population—usually

the leadership, responsible elites, or operationally responsible individuals; they are financial in

that they involve the use of financial instruments, such as asset freezing, blocking of financial

transactions, or financial services; and they are sanctions in that they are coercive measures

applied to effect change or constrain action.



However, targeted financial sanctions represent a potential refinement of the sanctions tool that

could be used in conjunction with other coercive efforts, such as travel bans, to minimize the

unintended effects of comprehensive sanctions and achieve greater effectiveness.

9.10.2 TFS related to terrorism and terrorist financing

FATF recommendation 6 requires ‘Countries should implement targeted financial sanctions

regimes to comply with United Nations Security Council resolutions relating to the prevention

and suppression of terrorism and terrorist financing. The resolutions require countries to freeze

without delay the funds or other assets of, and to ensure that no funds or other assets are made

available, directly or indirectly, to or for the benefit of, any person or entity either (i) designated

by, or under the authority of, the United Nations Security Council under Chapter VII of the

Charter of the United Nations, including in accordance with resolution 1267 (1999) and its

successor resolutions; or (ii) designated by that country pursuant to resolution 1373 (2001)’.

9.10.3 TFS related to Proliferation

FATF recommendation 7 requires ‘Countries should implement targeted financial sanctions to

comply with United Nations Security Council resolutions relating to the prevention, suppression

and disruption of proliferation of weapons of mass destruction and its financing. These

resolutions require countries to freeze without delay the funds or other assets of, and to ensure

that no funds and other assets are made available, directly or indirectly, to or for the benefit of,

any person or entity designated by, or under the authority of, the United Nations Security Council

under Chapter VII of the Charter of the United Nations.

9.10.4 Legal Obligation to Implement TFS in Bangladesh

To implement TFS in Bangladesh, the Government has issued Statutory Regulatory Order (SRO)

under section 2 of the United Nations (Security Council) Act, 1948 (29 November, 2012) and

amended the SRO to make it more comprehensive (June, 2013). To make the process

enforceable, a separate section has been included in ATA, 2009 through amendment of ATA in

2013. Section 20(A) of ATA, 2009 covers all the requirements under UNSCR’s tool were taken and

will be taken under chapter VII of the charter of UN. Before that BFIU used to issue circular letters

for reporting organizations to implement UNSCR resolutions.

For effective implementation of these provisions, detailed mechanism has been developed in

Anti-terrorism Rules, 2013. Under rule 16 of AT rules, 2013, banks as a reporting agency has to

maintain and update the listed individuals and entities in electronic form and regularly run a

check at the website of United Nations for updated list. In case there is any fund or economic

resources held by the listed individuals and entities, the banks should immediately stop payment

or transaction of funds, financial assets or economic resources and report to the BFIU within the

next working day with full particulars of the listed and/or the suspected individuals or entities or

related or connected individual identities.

9.10.5 Sources of Sanctions List to be Complied/Screened

a. UN Security council website (https://www.un.org/sc/suborg/en/sanctions/un-sc-

consolidated-list )

b. OFAC Sanction List from OFAC website;

c. BFIU website (https://www.bb.org.bd/bfiu/index.php)

d. Domestic sanction list from BFIU website;


e. Unilateral or Regional sanction list forwarded by BFIU

9.11 Automated Screening Mechanism of UNSCRs & OFAC

For effective implementation of TFS relating to TF & PF EXIM Bank introduce automated screening

mechanism through EXIM AML System (EXIM goAML Interface & Anti-Money Laundering Utility

Software) that could prohibit any listed individuals or entities to enter into our banking channel.

Branch should operate in such system whether system could detect any listed individuals or entities

prior to establish any relationship with them. In particular, branch need to emphasize on account

opening and any kind of foreign exchange transaction through our automated screening

mechanism so that any listed individuals or entities could not use the our formal financial channel.

In a word, Branch have to ensure that our screening mechanism has done before-

� any international relationship or transaction;

� opening any account or establishing relationship domestically.

For proper implementation of UN sanction list, every bank official must have enough knowledge

about-

� legal obligation and consequences of non-compliance;

� sources of information;

� what to do and how to do with sanction list;

� transactional review;

� how to deal with ‘false positives’;

� how to deal with actual match;

� how to deal with ‘aggrieved person or entity’;

� how to exercise ‘exemption’ requirements;

� listing & de-listing process.

9.11.1 Sanction Screening Process

Flow-chart for Sanction Screening by EXIM Bank


9.11.2 Screening Process for New/Walk-in Customer

Before a financial institution or Branch starts doing business for the first time with a new

customer, it should check published lists of known or suspected terrorists for a potential match.

Sources of Sanction List

(a) UN Security council website

(http://www.un.org/sc/committees/list_compend.shtml)

(b) BFIU website (https://www.bb.org.bd/bfiu/index.php) (c) Domestic sanction list from BFIU website (d) Unilateral or Regional sanction list forwarded by BFIU (e) OFAC SDN & Non-SDN Sanction List (https://sdnsearch.ofac.treas.gov)

Run a regular check including transactional review-

• before establish any relationship/ opening of any account • check the existing accounts/customer

• before any foreign transaction through SWIFT

• before providing remittance service to the walk-in customer or over the counter

• screening on identified risk

Report to BFIU (through EXIM Bank CCU)

If any match

(True positive)

found


Search Type:

Percentage : User should input full name like “MOHAMMAD ABDUL KARIM”

Like : Any part of the name Like “KARIM”

Click [Find] then system will generate a report based on the search

9.11.3 Sanction Screen Process for existing Customers

It’s an auto process run by Head Office based on the update UNSCR & OFAC sanction Data. BAMLCO of

the Branch should check & verify the Hit list as well as preserve the False Positive Statement of existing

Accounts list.


9.11.4 Screen Process of Entities

Branch need to check the entities name like: Correspondent/Advising/negotiating Bank, LC

Beneficiary/Importer/Exporter Company, Agent, Vessels & etc before establish any relationship. OFAC

sanction list need to follow on cross-border transaction.

9.11.5 Remittance Screening Process

In the remittance where funds received from a person or company in a foreign jurisdiction are

immediately remitted to another person or company in the same foreign jurisdiction, or to the sender’s

account in another jurisdiction. Remittance Screening process will identify the receiver and sender of the

Remittance who are in the published UNSCR & OFAC sanction list.

Remittance in EXIM Bank

1) Distributed by Head, FRMD (Exim exchange houses & Others ) – Screened Centrally at Head

Office, International Division.

2) Remittance received from web portal (Western Union, Money Gram , Express Money, Ria Money

Transfer & etc) – Branch should follow the name screening for new/walk-in customers.


Head Office and Branch need to keep the false positive statement of remittance processed data.

9.11.6 SWIFT Outgoing & Incoming Message Screening Process

Our banks have controls and procedures in place to address the risk of dealing with sanctioned parties for

trade finance or any cross border transactions through SWIFT. Both MT SWIFT messages (outgoing &

incoming) are being screened centrally at Head Office, International Division.

9.11.7 Outgoing/Sending SWIFT Message

Messages are being generated automatically from our core banking solution TEMENOS T24 and then

messages are transferred to Screening Server. Hit list generated by the system (EXIM goAML Interface &

Anti-Money Laundering Utility Software) automatically. Screening desk officer or responsible executive of

International Division verify the Hit list and generate False Positive & True Positive Statement.

9.11.8 Incoming/Receiving SWIFT Message

Balk SWIFT Messages are being download from our SWIFT system through EXIM TF AISER. And Hit list

generated by the system (EXIM goAML Interface & Anti-Money Laundering Utility Software)

automatically. Screening desk officer or responsible executive of International Division verify the Hit list

and generate False Positive & True Positive Statement.


9.11.9 Responsibilities for Head Office

Screening desk officer or responsible executive of International Division verify the Hit list and generate

False Positive & True Positive Statement, SWIFT Screen Outgoing/Incoming Summary Report on daily

basis. Compare the screened summary report with SWIFT Alliance Access daily data and also ensure the

screening process is done on every potential message prior to sending SWIFT messages to rest of the

world or our AD branches.

9.11.10 Responsibilities for AD Branches

AD Branches are needed to verify the Hit list and generate False Positive & True Positive statement,

SWIFT Screen Outgoing/Incoming Summary Report on daily basis. They need to perform only their own

branch data and reserve necessary screened print document before establish any relationship with

customers.

9.11.11 Refusing Process for True Positive Statement

Key Notes:

a) Branch can refuse or cut relationship with customers who want make relationship

with sanctioned persons or entity prior to permission of Head Office.

b) Branch can stop/hold any transaction if any intermediaries found in UN & OFAC

Sanction List with prior to permission of Head Office.

c) Head Office can stop/hold any transaction if any intermediaries found in UN & OFAC

Sanction List with prior to permission of Senior Management.

d) If any refuse/refund transactions is necessary to inform to BFIU, Bang

than CCU will informed it.

As per FATF recommendation 33 Financial Institution should maintain comprehensive statistics on

matters relevant to the effectiveness and efficiency of their AML/CFT systems.

9.12 Role of Branch/Subsidiary/Head Office D

a. Branches or subsidiaries or concerned Head Office Divisions

as instructed by CCU, Head Office

financing in proliferation of weapons

b. Branches or subsidiaries or concerned Head Office Divisions

by CCU, Head Office about the duties of officials


Refusing Process for True Positive Statement

Branch can refuse or cut relationship with customers who want make relationship


Branch can stop/hold any transaction if any intermediaries found in UN & OFAC

with prior to permission of Head Office.

Head Office can stop/hold any transaction if any intermediaries found in UN & OFAC

Sanction List with prior to permission of Senior Management.

If any refuse/refund transactions is necessary to inform to BFIU, Bang

than CCU will informed it.


matters relevant to the effectiveness and efficiency of their AML/CFT systems.

Role of Branch/Subsidiary/Head Office Division in Preventing TF & PF

Branches or subsidiaries or concerned Head Office Divisions must comply establish

as instructed by CCU, Head Office for detection and prevention of financing of terrorism and

financing in proliferation of weapons of mass destruction.

Branches or subsidiaries or concerned Head Office Divisions must comply all

about the duties of officials to ensure that ensure that they are complying


Branch can refuse or cut relationship with customers who want make relationship


Branch can stop/hold any transaction if any intermediaries found in UN & OFAC

Head Office can stop/hold any transaction if any intermediaries found in UN & OFAC

If any refuse/refund transactions is necessary to inform to BFIU, Bangladesh Bank


established procedures

for detection and prevention of financing of terrorism and

comply all instructions issued

ensure that they are complying



with the instructions issued by BFIU for detection and prevention of financing of terrorism and

financing in proliferation of weapons of mass destruction.

c. Branches or subsidiaries or concerned Head Office Divisions shall take necessary measures, with

appropriate caution and responsibility, to prevent and identify financial transactions through

which it is connected to any offence under ATA, 2009 and if any suspicious transaction is

identified, they will spontaneously report it to CCU for ultimate submission to BFIU without any

delay.

d. If any news of activities of financing of terrorism and financing of proliferation of weapons of

mass destruction are published in any mass media, branches or subsidiaries or concerned Head

Office Divisions shall send the details of the accounts (if any is found with them) of any persons

who are engaged in those activities to CCU for ultimate submission to BFIU immediately.

e. Branches or subsidiaries or concerned Head Office Divisions are required to conduct checks on

the names of new customers, and regular checks on the names of existing customers or any other

related individuals or entities, against the names in the UNSC TFS database as instructed by CCU.

If there is any name match, branches or subsidiaries or concerned Head Office Divisions are

required to take reasonable and appropriate measures to verify and confirm the identity of its

customer. Once confirmation has been obtained, they immediately must:

i. stop payment or transaction of funds, financial assets or economic resources or any other

services, if it is an existing customer;

ii. reject the potential customer, if the transaction has not commenced;

iii. report it to CCU for ultimate submission to BFIU; and

iv. inform the relevant supervisory authorities, if any.

f. Branches or subsidiaries or concerned Head Office Divisions run a check on the given parameters,

including transactional review, to verify whether individuals or entities listed or scheduled under

the ATA, 2009; individuals or entities owned or controlled directly or indirectly by such persons or

entities, as well as persons and entities acting on behalf of, or at the direction of, individuals or

entities listed or scheduled under the Act are holding any funds, financial assets or economic

resources or related services or having any form of relationship with them. If there is any name

match, branches or subsidiaries or concerned Head Office Divisions are required to take

reasonable and appropriate measures to verify and confirm the identity of its customer. Once

confirmation has been obtained, they immediately must:






g. Branches or subsidiaries or concerned Head Office Divisions are required to conduct checks on

the names of applicant, beneficiary, ordering bank/financial institution (in case of inward

remittance), intermediary bank and beneficiary bank/financial institution (in case of outward

remittance) of a wire transfer or MVTS against the names in the UNSC TFS database & BFIU

database as instructed by CCU. If there is any name match, branches or subsidiaries or concerned

Head Office Divisions are required to take reasonable and appropriate measures to verify and

confirm the identity of its customer. Once confirmation has been obtained, they immediately

must:

i. stop payment and return the fund to ordering bank/financial institution, if it is an inward

remittance ;

ii. reject the fund transfer, if it is an outward remittance ;





h. Branches or subsidiaries or concerned Head Office Divisions are required to conduct checks on

the names of persons or entities, goods, country, carrier, port of loading, port of destination,

place of transshipment, etc, involved in any international trade transaction against the names in

the UNSC TFS database & BFIU database as instructed by CCU. If there is any name match,

branches or subsidiaries or concerned Head Office Divisions are required to take reasonable and

appropriate measures to verify and confirm the identity of its customer. Once confirmation has

been obtained, they immediately must:

i. reject the transaction, if the transaction has not commenced;

ii. stop the transaction, if the transaction has already commenced ;



i. Branches or subsidiaries or concerned Head Office Divisions are required to conduct checks on

the names of new customers, and regular checks on the names of existing customers or any other

related individuals or entities of credit card, pre-paid card, CDM, POS, SMS Banking, AISER, call

center, etc. against the names in the UNSC TFS database & BFIU database as instructed by CCU. If

there is any name match, branches or subsidiaries or concerned Head Office Divisions are

required to take reasonable and appropriate measures to verify and confirm the identity of its

customer. Once confirmation has been obtained, they immediately must:





iv. inform the relevant supervisory authorities, if any

j. Branches or subsidiaries or concerned Head Office Divisions are required to ascertain potential

matches with the Consolidated List to confirm whether they are true matches to eliminate “false

positives”. The Branches or subsidiaries or concerned Head Office Divisions are required to make

further inquiries from the customer or counter-party (where relevant) to assist in determining

whether the match is a true match.

k. Branch or Subsidiary or concerned Head Office Division is required to maintain all information &

documents related to requirements & compliance of this chapter in accordance with record

keeping requirements under Chapter Thirteen.

9.13 Role of CCU in Preventing TF & PF

a. CCU shall establish a procedure duly approved by the Board of Directors for detection and

prevention of financing of terrorism and financing in proliferation of weapons of mass

destruction and circulate it to branches or subsidiaries or concerned Head Office Divisions for

meticulous compliance.

b. CCU shall issue instructions about the duties of Bank officials, review those instruction time to

time and ensure that they are complying with the instructions issued by BFIU.

c. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions have taken

necessary measures, with appropriate caution and responsibility, to prevent and identify financial

transactions through which it is connected to any offence under ATA, 2009 and if any suspicious

transaction report is received by CCU from branches or subsidiaries or concerned Head Office

Divisions, the CCU shall spontaneously report it to Bangladesh Bank/BFIU without any delay.



d. CCU shall ensure that if any news of activities of financing of terrorism and financing of

proliferation of weapons of mass destruction are published in any mass media, branches or

subsidiaries or concerned Head Office Divisions are sending the details of the accounts (if any is

found with them) of any persons who are engaged in those activities to CCU and CCU shall report

it to BFIU immediately.

e. CCU is required to keep updated with the various resolutions passed by the United Nations

Security Council (UNSC) on counter terrorism measures which require sanctions against

individuals and entities belonging or related to the TF & PF. CCU is required to maintain a list of

individuals and entities (the Consolidated List) for this purpose and make it available to branches

or subsidiaries or concerned Head Office Divisions. The updated UN sanctions List can be

obtained at: https://www.un.org/sc/suborg/en/sanctions/un-sc-consolidated-list

f. CCU shall maintain a database of names and particulars of listed persons as per requirements of

ATA, 2009 and circulars issued by BIFU under ATA, 2009 by BFIU. CCU shall update the database

as & when require, and make it available to branches or subsidiaries or concerned Head Office

Divisions compliance. The updated BFIU sanction list can be obtained at:

https://www.bb.org.bd/bfiu/index.php

g. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions are

conducting checks on the names of new customers, and regular checks on the names of existing

customers or any other related individuals or entities, against the names in the UNSC TFS

database as instructed by CCU. CCU shall also ensure that if there is any name match, branches or

subsidiaries or concerned Head Office Divisions are taking reasonable and appropriate measures

to verify and confirm the identity of its customer. Once confirmation has been obtained, they are

immediately sending report to CCU and CCU shall report it to BFIU.

h. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions run a check on

the given parameters, including transactional review, to verify whether individuals or entities

listed or scheduled under the ATA, 2009; individuals or entities owned or controlled directly or

indirectly by such persons or entities, as well as persons and entities acting on behalf of, or at the

direction of, individuals or entities listed or scheduled under the Act are holding any funds,

financial assets or economic resources or related services or having any form of relationship with

them. CCU shall also ensure that if there is any name match, branches or subsidiaries or

concerned Head Office Divisions are taking reasonable and appropriate measures to verify and

confirm the identity of its customer. Once confirmation has been obtained, they are immediately

sending report to CCU and CCU shall report it to BFIU.

i. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions are conducting

checks on the names of applicant, beneficiary, ordering bank/financial institution (in case of

inward remittance), intermediary bank and beneficiary bank/financial institution (in case of

outward remittance) of a wire transfer or MVTS against the names in the UNSC TFS database &

BFIU database as instructed by CCU. CCU shall also ensure that if there is any name match,

branches or subsidiaries or concerned Head Office Divisions are taking reasonable and

appropriate measures to verify and confirm the identity of its customer. Once confirmation has

been obtained, they are immediately sending report to CCU and CCU shall report it to BFIU.

j. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions are required

to conduct checks on the names of persons or entities, goods, country, carrier, port of loading,

port of destination, place of transshipment, etc, involved in any international trade transaction

against the names in the UNSC TFS database & BFIU database as instructed by CCU. CCU shall

also ensure that if there is any name match, branches or subsidiaries or concerned Head Office

Divisions are taking reasonable and appropriate measures to verify and confirm the identity of its



customer. Once confirmation has been obtained, they are immediately sending report to CCU

and CCU shall report it to BFIU.

k. CCU shall ensure that branches or subsidiaries or concerned Head Office Divisions are required

to conduct checks on the names of new customers, and regular checks on the names of existing

customers or any other related individuals or entities of credit card, pre-paid card, CDM, POS,

SMS Banking, AISER, call center, etc. against the names in the UNSC TFS database & BFIU

database as instructed by CCU. CCU shall also ensure that if there is any name match, branches or

subsidiaries or concerned Head Office Divisions are taking reasonable and appropriate measures

to verify and confirm the identity of its customer. Once confirmation has been obtained, they are

immediately sending report to CCU and CCU shall report it to BFIU.

l. CCU shall maintain all information & documents related to requirements & compliance of this

chapter in accordance with record keeping requirements under Chapter Thirteen.



CHAPTER 10

Transaction Monitoring

10.1 Software Based Transaction Profile (TP) Setting & Transaction Monitoring Techniques

Components of Transaction Profile (TP)

Deposits:

� Expected cash deposits (through branch/ATMs)

� Expected deposit through transfer/instruments

� Expected deposit through remittance

� Expected deposit from export proceeds

� Other expected deposits (specific)

Withdrawals:

� Expected cash withdrawals (through branch/ATMs)

� Expected withdrawals through transfer/instruments

� Expected withdrawals of remittance

� Expected withdrawal/payment against import

� Other expected withdrawals (specific)

Key Requirements for setting TP

Customer Segmentation

This task involves applying various data analysis techniques to the in-scope data to determine the

number and type of the customer segments that can be deployed in the system. Successful execution of

this step enables the implementation team to determine appropriate thresholds based on the behavior

exhibited by the respective customer segment, as opposed to a threshold guessed on the entire customer

base.

Initial TP Limit-Setting

In this step, advanced statistical analysis is used to determine effective threshold values which should be

applied to a given scenario for successful execution. The threshold-setting exercise should be performed

for each customer segment and risk level. Therefore, it is possible to have multiple threshold values for a

given scenario, as each value will be applicable at a given customer segment and risk level.

Limit Modification

Prior to going live with the chosen thresholds from the initial threshold-setting exercise, a dry run of the

alert-generation cycle should be performed to produce alerts that can be investigated in the test

environment. A successful investigation of these alerts can provide insight into the alert quality to be

expected in the production environment. Therefore, this step gives an opportunity to perform further

threshold-tuning before deploying the selected thresholds in production.

Ongoing Tuning and Limit Enhancements

Additionally, it is essential to execute a limit-tuning exercise on a periodic basis that consists of

generating and investigating alerts just below the threshold values. This exercise gives insight into the

existence (or lack) of suspicious activity just below the set thresholds. Existence of such activity will

require the thresholds to be lowered. If there is no suspicious activity just below the threshold values,



then a separate exercise consisting of lifting the threshold values above the current values can be

performed.

Required Understanding for Setting TP

� Making reasonable efforts to determine the true identity and beneficial ownership of accounts;

� Understanding sources of funds;

� Understanding nature of customers’ business;

� Understanding reasonable account activity;

� Knowing your customer’s customer (where applicable); etc.

Some examples of TP setting techniques

1. While a house wife declared in the TP that her husband’s income as her main source of

funds then the responsible bank official should justify her husband’s nature of

business/profession, account activity, reality of the sources of funds and its true entity;

etc. through proper scrutiny.

2. While a businessman declared that his/her business income is the main source of funds

then the responsible bank official should justify the true entity, business turnover and its

reality, nature of business, account activity and the entity’s customers; etc. through

proper scrutiny.

3. While a student declared that his/her parent’s income as his/her main source of funds

then the responsible bank official should justify its parent’s nature of

business/profession, account activity, reality of the sources of funds and grounds for

operating the account; etc. through proper scrutiny.

Software Based Technique & Reports in EXIM AML System

(Exim goAML Interface & Anti-Money Laundering Utility Software)

TP Reports in Exim AML System:

o Accounts’ TP Detail

o A/C Wise Occupation with TP

o TP Error A/C List

o TP Error Chart (A/C have TP)

o TP Not Found List

o TP Not Found Summary Chart

o Details A/C with Posting Rest.

o TP Exceed Summary (Month End)

o TP Exceed Summary (Day wise)

o TP Exceed (Single A/C)

� Account’s TP Detail: This report will provide the TP related information of all transacted

A/C’s in a particular branch.


� A/c wise TP with Occupation: This report will provide the TP related information for

specific occupation on particular branch with some more information like: A/c Title,

Opening Date, and Occupation.

� TP Error A/C List: This report will provide the Accounts list that A/Cs still having TP error.

� TP Error Chart: A chart with comparison good input TP and error TP for particular branch.

� TP Not Found List: A report with Accounts list which do not have TP for particular branch.

� TP Not Found Summary Chart: A chart with account’s list which do not have TP for

particular branch.

� TP Exceed Summary (Day wise) : A report as below

� TP Exceed Summary (Month End):


� TP Exceed (Single A/C):

The above report (TP Exceed (Single A/C)) will provide the view of each month historical transactional

summery of a particular Account’s TP as well. This report also guide to branch officials to set proper TP

in our banking software Temenos T24.

Transaction Profile (TP) of the client’s is very much related with client transactions. Using the above

system & reports, and according to BFIU Master Circular#10 selection 3.4 (7) branch shall evaluate the

quality of Transaction Profile (TP) of Branch Client’s. The threshold reports based on Transaction Profile

(TP) and Client transaction history, so proper setting of transaction profile (TP) is very much important to

get appropriate alert reports as well as help the branches to determine STR/STA which is the one of the

important part of our AML compliance program.

Branch Customer’s Transaction Profile (TP) shall have to review on regular basic and

accordance with risk that has been allocated each individual and should be taken

according to RBA Risk Register.

Key Message: Too many Mismatch/Exceed in Transaction Profile (TP).

Sudden TP Exceed by Depositing huge cash and withdrawal by cheques.

Customers unable give proper expiation.

Utilization of account by other individuals.


Transaction Monitoring

Branch needs to monitor the transactions of customer on a regular basis. The complex transaction,

transactions with deviation from normal transaction and the transactions that does not have reasonable

purpose or the transaction with unusual pattern shall have to be more emphasized during monitoring. An

effective system has to be developed by the banks to review the risk by maintaining a specific time

interval; and according to the review, Enhanced Due Diligence has to be maintained for accounts that are

in high risk category.

Key components of transaction monitoring- An effective monitoring system comprises the following two

components:-

(i) Monitoring performed by staff who deal directly with customers (e.g. relationship

managers) or process customer transactions (e.g. counter staff) (referred to in this paper

as “front-line staff”); and

(ii) Regular reviews of past transactions to detect unusual activities by BAMLCO.

Branch have already developed a software bases transaction monitoring system in our EXIM AML System

(EXIM goAML Interface & Anti-Money Laundering Utility Software) where the branches/divisions of Head

Office can monitor the transaction in various ways that includes but not limited to the followings:

• Transactions in local currency;

• Transactions in foreign currency;

• Transactions above the designated threshold determined by the branch;

• Cash transactions under CTR threshold to find out structuring;

• Transactions related with international trade;

• Transaction screening with local and UN Sanction list.

10.2 Software based Transaction Monitoring in EXIM AML System

The purpose of Transaction Monitoring is to provide ongoing identification of suspicious activity from

customer transaction data. It is generally two-stage process whereby first, instances of potentially

suspicious behavior are identified and then these instances of potentially suspicious behavior are

reviewed by an analyst to determine if, ultimately, a SAR should be filed.

To identify potential suspicious behavior, Exim Bank implemented an automated AML transaction

Monitoring System.

10.2.1 Transaction Summary Statistics

(A report based on the below parameter)

Transaction Summary Statistics: It will provide historical transaction statistic based on the

transaction type, amount, number of transactions and product for a particular period. It will help

the Annalist/BAMLCO to find out top transacted A/c’s easily.


10.2.2 A/C Wise Online Transaction

(Intra Bank Transaction summary)

A/C Wise Online Transaction: It will provide historical Inter Bank transaction statistic based on

number transactions and accounts range for a particular period. It will help the Annalist/BAMLCO

to find out top Inter Bank Transacted A/c’s easily.

10.2.3 Geographical Online Transaction

(Online Transaction based on geographical location)

Geographical Online Transaction: This system will provide a geographical transactional statistic

for particular A/c’s and for a particular period from different branches of EXIM Bank within

Bangladesh through online transactions.


10.2.4 Transaction 360 Degree

(How much transactions do the A/c’s compare to own & other branches)

Transaction 360 Degree: This system will provide a view how much transaction each A/c’s holder

does in his own branch compare to rest of the branches of EXIM Bank within Bangladesh for a

particular period.

10.2.5 Detail of Border Area transaction of each A/c’s

Border Area Transaction Analysis: It will provide geographical transaction statistic considering the

border areas and related branches of EXIM Bank within Bangladesh for particular A/c’s and for a

particular period which transactions are done through especially online.


10.2.6 Transaction Pattern Analysis

(Find out unusual transaction through Transaction Deviation Analysis)

Deviation analysis may mean;

• in statistics; measurement of the absolute difference between any one number in a set and the

mean of the set.

• in social psychology; monitoring of the behavior of people or objects within systems to measure

compliance with expected or desired norms in order to trigger alerts, identity users or spot

anomalies.

Why Transaction Deviation Analysis ?

• Market analysis and management

o Traget marketing, Market basket analysis and Customer’s

• Risk analysis and management

o Rorecasting and competitive analysis

• Fraud detection and detection of unusual patterns (outliers)

In AML point of view in transaction deviation analysis:

This method (transaction deviation analysis) allows monitoring each customer’s behavior over a period of

time and compares how their current transaction behavior compares to their past behavior.

This mathematical technique eliminates the disadvantages of the KYC approach discussed above and is

more accurate in identifying out-of-pattern transaction activity.


Single A/C Transaction Deviation Analysis result: Report for a particular period of a Single A/C that will

show the (+/-) deviations of different months. From this result branch official can get the output which

month that account holder’s is highly deviated.

Customers are doing thousands transactions over the day/month/year through different kind of delivery

channels. Our deviation based automated monitoring system is a kind of rules-based automated

monitoring systems that are capable of identifying unusual activities based on client transaction history

as well as flexible parameters to detect the highly deviated transaction. Branch can generate the

deviation report by using this sophisticated systems and they input parameter based on their product,

customer and geographical area.

For example: Investment customer transaction on AWCD Account’s will be highly deviated based on their

investment deal and number of transactions/amount between urban branch & rural branch might be

different.

Key Message: Use the date range minimum six(6) month to get the proper output.

No need to input any parameter to see single account’s deviation.

Number of transactions & amount parameter is based-on Branch

Customer/ Product /Location.

Find-out top deviated accounts & keep the records.

A monitoring system will be effective only if suspicious transactions identified by the system are

carefully examined and investigated by the Branch.

10.3 Structuring Report Analysis

Organizing a transaction in such as way as avoid triggering a reporting or record-keeping threshold or

CTR. It is one of most well known money laundering methods which occurred in the Money Laundering

process through Placement. Clients deposit small amounts of cash under reporting threshold by launders

so, that regulatory authority (B.B.) could get information of them.


Key Message: Use the flexible parameter to get the summary output.

Find-out who perform this activity as a top

Find the Account’s among the top which is not reported in CTR.

Keep the month wise Structuring Report.

10.4 CTR Report Analysis

CTR report generated automatically through our Banking Software “TEMENOS T24” to EXIM goAML

Interface on monthly basis. Branches are needed to submit the report to CCU with accurate information.

Simultaneously, branches need to identify whether there is any suspicious transaction within the CTR

data. Branch shall perform on this activity by reviewing the CTR data.

Key Message: Find-out who perform this activity as a top.

Find who reported as a new.

Compare CTR data with customer Business turnover or current status.

Compare the CTR and Structuring data Simultaneously.

Find-out is there any Account’s that STR must be reported as STR.



CHAPTER 11

Recruitment, Awareness and Training

11.1 Recruitment

The management should be aware of the fact that vested groups in connection with Money Laundering

try to entice employees of banks and financial institutions for transacting their ill-gotten money in and

out of the banking channel. For that reason, we have to utilize an elaborate and industry standard

screening mechanism to attract and retain employees with the highest level of integrity and competence.

The Human Resources Division must ensure that employee screening mechanism is an integral part of the

recruitment process.

11.1.1 Pre-employment Screening

This shall refer to the process of verifying the accuracy of a candidate’s claims and investigating the

backgrounds of potential employees. The important steps to be completed in this stage are as below:

• Performing the initial screening of the candidates against the specific requirements of a position,

• Conducting a comprehensive interview to judge the candidates’ honesty, integrity, and

motivational level in addition to other aptitudes,

• Obtaining verification of the identity of the candidates including address,

• Obtaining proof of academic & professional qualifications,

• Obtaining proof of employment history,

• Obtaining reference letters from persons acceptable to the bank.

11.1.2 Post-employment Screening

There may be instances where further screening is required once an individual joins the organization. The

checks may be more or less similar to those outlined above, including the following:

• Obtaining verification of the academic qualifications from the relevant organizations,

• Monitoring for drastic upward or downward changes in lifestyle,

• Monitoring for undesirable signs in credit habit,

• Monitoring for drug, alcohol or other substance abuse,

• Monitoring for domestic violence and/or criminal affiliations.

11.2 Employee Training

Every employee of the bank shall receive at least the basic AML & CFT training. It should cover all the

aspects of AML & CFT measures to be adopted in Bangladesh. The basic AML & CFT trainings should have

at least daylong sessions with evaluation modules. We can also hold refreshment training programs on

AML & CFT on a regular basis so as to keep the employees updated about the issues. Later, we arrange

advanced trainings on AML & CFT, which are mainly job specific trainings for the employees dealing with

trades, foreign transactions, credits, etc. Both categories of AML & CFT trainings are introduced below:

11.2.1 Basic Trainings

The sole purpose of the basic AML & CFT training sessions is to impart into the employees an overview

of/ introduction to AML & CFT activities. The basic AML & CFT training should cover the following issues:

• Overview of AML & CFT initiatives,

• Relevant provisions of AML related Acts & Rules like MLPA & ATA,

• Relevant Circulars & Guidelines of BFIU,

• Compliance of Regulatory Requirements,

• The art of sensing suspicious transactions,

• The reporting of activities including STR/SAR,

• The ongoing monitoring mechanism,

• The sanction screening mechanism, etc.



11.2.2 Advanced Trainings

The advanced training sessions are mainly the job specific ones that we should arrange as focused

trainings. The advanced AML & CFT trainings should be arranged described below:

• Trade based money laundering training for the employees dealing with foreign or domestic trade,

• UNSCR screening related training for the employees dealing with international transactions,

customer relations, account opening,

• Credit fraud related training for the employees dealing with advance and credit of the bank,

• Customer due diligence and ongoing monitoring of transaction related for the employees dealing

with transactions of customers, etc.

11.3 Awareness Building

Awareness building is the first and foremost activity in conducting AML & CFT operations in the country.

Every bank should have a means/ initiative to hold different programs on AML & CFT that will eventually

focus on the building of awareness among the bankers, customers and mass people. These awareness

building programs should also include the Board of Directors, the policymakers and the Management of

the bank. We can perform these activities in the manners described below:

11.3.1 Awareness of Senior Management

The senior Management of the bank should be aware of the issues related to AML & CFT activities in the

country. This is mainly necessary in order to implement the AML & CFT measures in the bank. In this

regard, the bank shall arrange, at least once a year, an awareness building program for the members of

the Board of Directors of the bank. In absence of the Board of Directors, the members of the highest

policy making committee and any other people engaged in making policy for the bank should participate

in these awareness building programs.

11.3.2 Awareness of Customer

The customers of the bank are the prime groups that should be made aware of AML & CFT activities

occurring through the banking channels. The customers should be made aware of the bad effects of

executing ML & TF like harming the economy of the country, tarnishing the image of the country and

developing a tendency to neglect the related laws & rules. In this connection, the bank may arrange

awareness building initiatives like the distribution of leaflets, handbills, brochures, etc.

11.3.3 Awareness of Mass People

The mass people should be made aware of the AML & CFT activities and their bad effects on the society,

economy and overall, the country. In this connection, the bank should take different steps like

circulating/ broadcasting/ telecasting appropriate advertisements and documentaries on radios,

televisions and/ or other mass media, whichever deems best. The bank should also participate in

awareness building initiatives often arranged by Bangladesh Bank, the government and other regulatory

bodies. Additionally, the bank may take different steps like using billboards, posters, festoons;

distributing leaflets, handbills and using other media as well.



CHAPTER 12

Reporting

Obligations under Law Section 2(Z) of MLPA, 2012 and Section 2(16) of ATA, 2009

Obligations under Rules MLP Rules, 2013

Every bank is obliged to send various reports (suspicious transaction, suspicious activity, cash transaction,

self assessment, independent testing procedure etc.) to Bangladesh Financial Intelligence Unit,

Bangladesh Bank without any delay or in due time. Besides they have to produce any documents that is

sought by Bangladesh Bank.

12.1 Cash Transaction Reporting

Every branch will prepare the monthly Cash Transaction Report (CTR) of Tk. 10 Lac and above for cash

transaction per day (Including Online, ATM related any cash Deposit or Withdrawal separately) and send

it to CCU/AMLD in due time every month as per BFIU Circular no. 10 dated 28/12/2014 through existing

software named “FIU Reporting System” and newly included Web based Application named “goAML”

through online. If the branch have not any such transaction, it should be report to the CCU as ‘There is no

reportable CTR’. Besides, every branch needs to preserve its CTR in their own branch.

• Recognition of Suspicious Cash Transactions:

� Branches need to identify whether there is any suspicious transaction reviewing the Cash

Transactions Report;

� If any suspicious transaction is found, the branch will submit it as ‘Suspicious Transaction

Report’ separately to the CCU;

� If no suspicious transaction is identified, it needs to inform to the CCU as ‘No suspicious

transaction has been found’ while reporting the CTR;

� Moreover CCU has to review all the cash transaction from the branches above the threshold

and search for any suspicious transaction.

� If any suspicious transaction is found, the CCU will submit it as ‘Suspicious Transaction

Report’ separately to the BFIU.

� If no such transaction is identified, it needs to inform to the goAML Massage Board as ‘No

suspicious transaction has been found’ while reporting the CTR.

• Accurate Customer Information:

� The branches have to send CTR data with accurate and full customer information.

� In case of information of CTR reported customer- Name, Father’s Name, Mother’s Name,

Spouse Name, Present, Permanent & Official address, Gender, Identity document like NID,

Passport, Birth Registration Certificate, Driving License, e-TIN (if any), Date of Birth, Place of

Birth, Nationality, Occupation details, Contact no. etc should be full and accurate where

sending to Head Office.

• Online CTR Submission:

� The branches have to send the CTR through our internal web based software “Exim goAML

Interface & Anti-Money Laundering Utility Software”;

� The branches as well as CCU also have to submit the CTR soft copy provided with “FIU

Reporting System” by CD/DVD copy without receiving further instructions from BFIU,

Bangladesh Bank;



� The branches have to ensure the accuracy & timeliness while reporting to CCU;

� The Central Compliance Unit (CCU) needs to prepare the accumulated CTR received from its

all branches;

� The CCU must ensure the accuracy and timeliness while reporting to BFIU.

� CCU has to inform BFIU through the message board of ‘goAML’ web in case of no transaction

is found to be reported as CTR.

� Moreover, CCU as well as branch must ensure the preservation of information related to cash

transaction report up to 5 (five) years from the month of submission to BFIU.

12.2 Suspicious Transaction Reporting

Generally STR/SAR means a formatted report of suspicious transactions/activities where there is

reasonable grounds to believe that funds are the proceeds of predicate offence or may be linked to

terrorist activity or the transactions are not seems to be usual manner. Suspicion basically involves a

personal and subjective assessment. Branches have to assess whether there are reasonable grounds to

suspect that a transaction is related to money laundering offence or a financing of terrorism offence.

As per Section 2(z) of Money Laundering Prevention Act, 2012

‘Suspicious Transaction’ means such transactions –

a) which deviates from usual transactions;

b) of which there is ground to suspect that,

1. the property is the proceeds of an offence,

2. it is financing to any terrorist activity, a terrorist group or an individual terrorist;

c) which is, for the purposes of this Act, any other transaction or attempt of transaction delineated

in the instructions issued by Bangladesh bank from time to time.

As per Section 2(16) of Anti-Terrorism Act, 2009

‘suspicious transaction’ means such transactions –

a) which is different from usual transactions;

b) which invokes presumption that,

1. it is the proceeds of an offence under this Act,

2. it relates to financing of terrorist activities or a terrorist person or entity;

c) which is any other transactions or an attempt for transactions delineated in the instructions

issued by the Bangladesh Bank from time to time for the purposes of this Act.

• Evaluation of Internal Suspicious Activity Report (ISAR)

� All officials engaged in our branches at all levels must be made aware of the identity of the

CAMLCO, his Deputy and BAMLCO and the procedure to follow when making a suspicious activity

report.

� All relevant officials must be aware about ISAR form and if any suspicious activity/transaction is

occurred by any desk then it should be reported by ISAR form to BAMLCO.

� BAMLCO should evaluate that report and if found any suspicious matter then he should report

the matter by Annexure-‘Ga’ of BFIU Circular-10 to the CAMLCO through Branch Relationship

Manager.

� A suggested format of an internal report form is set out in Annexure- C Branch should have the

practice of internal reporting system by using ISAR form. All record should be documented at

branch level.



• Recognition of Suspicious Transactions

Recognition of STR/SAR may be started identifying unusual transaction and activity. Such unusual

transaction may be unusual in terms of complexity of transaction, nature of transaction, volume of

transaction, time of transaction etc. Generally the detection of something unusual may be sourced as

follows:

� Comparing the KYC profile, if any inconsistency is found and there is no reasonable

explanation;

� By monitoring customer transactions;

� By using red flag indicator.

A transaction which appears unusual is not necessarily suspicious. Even customers with a stable and

predictable transactions profile will have periodic transactions that are unusual for them. Many

customers will, for perfectly good reasons, have an erratic pattern of transactions or account activity.

So the unusual is, in the first instance, only a basis for further enquiry, which may in turn require

judgment as to whether it is suspicious. A transaction or activity may not be suspicious at the time,

but if suspicions are raised later, an obligation to report then arises. Some red flag indicators for

identifying STR/SAR related to ML & TF are shown below:-

Red Flags pointing to Money Laundering

� The client cannot provide satisfactory evidence of identity.

� Situations where it is very difficult to verify customer information.

� Situations where the source of funds cannot be easily verified.

� Transactions in countries in which the parties are non-residents and their only purpose is a

capital investment (they are not interested in living at the property they are buying).

� Frequent change of ownership of same property in unusually short time periods with no

apparent business, economic or other legitimate reason and between related persons.

� Client wants to re-sell Property shortly after purchase at a significantly different purchase

price, without corresponding changes in market values in the same area.

� Client wishes to form or purchase a company whose corporate objective is irrelevant to the

client’s normal profession or activities, without a reasonable explanation.

� The client sets up shell companies with nominee shareholders and/or directors.

� Client repeatedly changes Attorneys within a short period of time without any reasonable

explanation.

� Client purchases property in names of other persons or uses different names on offers to

purchase, closing documents and deposit receipts.

� Client deposits a large amount of cash with branches to make payments which are outside of

the client’s profile.

� Client negotiates a purchase but wants to record a lower value on documents, paying the

difference “under the table”, (inadequate consideration).

� Client’s documents such as identification, statement of income or employment details are

provided by an intermediary who has no apparent reason to be involved, (the intermediary

may be the real client).

� Transaction involves legal entities and there is no relationship seen between the transaction

and the business activity of the buying company, or the company has no business activity.

� Client requests the firm to act as his agent in obtaining high sum bankers’ drafts, cashiers’

cheques and other cash equivalent or near cash monetary instruments or in making wire

transfers to and from other banks or financial institutions, (anonymity).

� Divergence from the type, volume or frequency of transactions expected in the course of the

business relationship.

� Client gives power of attorney to a non-relative to conduct large transactions (same as

above).



� Use of letters of credit to move money between those countries, where such trade would not

normally occur and / or is not consistent with the customer’s usual business activity. A Letter

of credit is generally resorted to so as to accord more legitimacy to the transaction in order

to conceal the real facts.

� The method of payment requested by the client appears inconsistent with the risk

characteristics of the transaction. For example receipt of an advance payment for a shipment

from a new seller in a high-risk jurisdiction.

� The transaction involves the use of repeatedly amended or frequently extended letters of

credit without reasonable justification or that includes changes in regard to the beneficiary or

location of payment without any apparent reason.

� Inward remittances in multiple accounts and payments made from multiple accounts for

trade transaction of same business entity are indicators for Trade Based Money Laundering

(TBML). In this regard the study of foreign exchange remittances may help detect the

offence.

� The commodity is shipped to or from a jurisdiction designated as ‘high risk’ for ML activities

or sensitive / non co-operative jurisdictions.

� The commodity is transshipped through one or more such high risk / sensitive jurisdictions

for no apparent economic reason.

� Transaction involves shipment of goods inconsistent with normal geographic trade patterns

of the jurisdiction i.e. trade in goods other than goods which are normally exported/

imported by a jurisdiction or which does not make any economic sense.

� Significant discrepancies appear between the value of the commodity reported on the

invoice and the commodity’s fair market value.

� Consignment size or type of commodity being shipped appears inconsistent with the scale or

capacity of the exporter or importer’s having regard to their regular business activities or the

shipment does not make economic sense i.e. there is no reasonable explanation for the

client’s financial investment into the shipment.

� Trade transaction reveals links between representatives of companies exchanging goods i.e.

same owners or management.

Red Flags pointing to Financing of Terrorism

Behavioral Indicators:

� The parties to the transaction (owner, beneficiary, etc.) are from countries known to support

terrorist activities and organizations.

� Use of false corporations, including shell-companies.

� Inclusion of the individual or entity in the United Nations 1267 and others Sanction list.

� Media reports that the account holder is linked to known terrorist organizations or is

engaged in terrorist activities.

� Beneficial owner of the account not properly identified.

� Use of nominees, trusts, family members or third party accounts.

� Use of false identification.

� Abuse of non-profit organization.

Indicators linked to the financial transactions:

� The use of funds by the non-profit organization is not consistent with the purpose for which it

was established.

� The transaction is not economically justified considering the account holder’s business or

profession.

� A series of complicated transfers of funds from one person to another as a means to hide the

source and intended use of the funds.

� Transactions which are inconsistent with the account’s normal activity.



� Deposits were structured below the reporting requirements to avoid detection.

� Multiple cash deposits and withdrawals with suspicious references.

� Frequent domestic and international ATM activity.

� No business rationale or economic justification for the transaction.

� Unusual cash activity in foreign bank accounts.

� Multiple cash deposits in small amounts in an account followed by a large wire transfer to

another country.

� Use of multiple, foreign bank accounts.

All suspicions reported to the CCU should be documented, or recorded electronically. The report

should include full details of the customer who is the subject of concern and as full a statement as

possible of the information giving rise to the suspicion. All internal enquiries made in relation to the

report should also be documented. This information may be required to supplement the initial report

or as evidence of good practice and best endeavors if, at some future date, there is an investigation

and the suspicions are confirmed or disproved.

The following chart shows the graphical presentation of recognition of STR/SAR-

• Suspicious Transaction Reporting Procedures:

The identification of STR/SAR may be sourced from unusual transaction or activity. In case of

reporting of STR/SAR, branch should conduct the following 3 stages:

� Identification:

This stage is very vital for STR/SAR reporting. Depending on size, need and complexity of banks

monitoring of unusual transactions may be automated, manually or both. Our Bank has been using

software based Transaction Monitoring system where some specialized feature on that software

which can help branch officials to detect unusual transactions or activities.

Branch have an adequate software based information system which alert appropriate branch officials

and management to find out unusual/suspicious transaction/activity. Training of staff in the

identification of unusual/suspicious activity is an ongoing activity of our bank. The software based

Transaction Monitoring system is set out in Chapter Ten of this guidelines.

Comparing

Information provided in AOF

Transaction Profile

Normal/Expected

Transaction

Consistent Findings Normal/

Expected

Transaction

Unusual

Transaction

Inconsistent



� Evaluation:

This part must be in place at branch level and Central Compliance Unit (CCU). After identification of

STR/SAR at branch level, BAMLCO should evaluate the transaction/activity to identify suspicion by

interviewing the customer or through any other means. If BAMLCO is not satisfied, he should forward

the report to CCU. After receiving report from branch, CCU should check the sufficiency of the

required documents. Every stages of evaluation (whether reported to BFIU or not), Branch should

keep records with proper manner.

� Disclosure:

This is the final stage and branch should submit STR/SAR to BFIU through CCU if it still looks

suspicious.

For simplification, the flow chart given below shows STR/SAR identification and reporting procedures:

� Filling an STR:

The final output of an AML & CFT compliance program is reporting of suspicious transaction or

reporting of suspicious activity. Suspicious Transaction Report (STR) or Suspicious Activity Report

(SAR) is an excellent tool for mitigating or minimizing the AML & CFT risk for banks. Therefore it is

necessary for the safety and soundness of the bank. The following matter should be taken

regarding submission of an STR/SAR:-

1. After receiving any ISAR form from any desk officer which is finally reportable to CCU,

BAMLCO should fill up carefully ‘Suspicious Transaction Report (STR) Form’ as per Annexure-

‘Ga’ of BFIU Circular-10;

2. The following documents should be attached with STR form:

i) Account Opening Form along with submitted documents,

ii) KYC Profile, Transaction Profile,

iii) Account Statement for last one year,

iv) Supporting Voucher/correspondence mentioned in sl. no. H of STR form,

v) Others (if any);

3. All documents enclosed with STR form should be attested by BAMLCO or Operation Manager;

4. Finally STR should be submitted by ‘Branch Relationship Manager’ to ‘CAMLCO’ of the CCU by

separate Letter for every particular STR with ‘Confidential’ marked;

5. Office copy of all related documents should be preserved by separate file at branch level.

Evaluated by

BAMLCO

Arrange proper

documents and

Sent to CCU

Check the sufficiency

of documents by CCU

Report to BFIU

Suspicious

Close with

proper records

Not

suspicious Findings Detect unusual

transaction/activity



� Finding & Reviewing the Documents:

The following matter should be taken when finding & reviewing the documents related to STR:-

1. After receiving any ISAR form from any desk officer, BAMLCO should review and analyze all

documents relating to ISAR form;

2. Account Opening Form should be properly filled up along with all relevant information;

3. Documents of Sl. no. L of ‘Suspicious Transaction Report (STR) Form’ as per Annexure-‘Ga’ of

BFIU Circular-10 should be relevant & accurate.

• Tipping Off

Branch, the bank officials need to consider the confidentiality of the reporting of STR/SAR. Branch

should not make any behavior or performance that could tip-off the customer and he/she (the

customer) could be cautious.

12.3 Quarterly AML/CFT Meeting Minutes Report

As per BFIU Circular no. 10 branches have to attend a meeting quarterly basis regarding AML/CFT issues

as per agenda send by BFIU.

12.4 Bi-Monthly Statement (Information to Central Task Force)

As per Central Taskforce instruction, branches have to send the above mentioned statement bi-monthly

basis to Central Taskforce through CCU of Head Office. The statement have 2 statements (Statement-2 &

statement-3).

12.5 Self Assessment Reports & Independent Testing Procedures

For prevention of money laundering and combating the financing of terrorism and reviewing the Self

Assessment report from Branches and proper judgment of Independent Testing Procedures, adequate

manpower should be allocated to Internal Control & Compliance Division (ICCD) whose have to

knowledge regarding AML/CFT related existing Laws, Rules, Instructions of BFIU and self policy of the

bank.

12.5.1 Responsibilities of the Branch regarding Self Assessment Report

Banking system in Bangladesh is mainly based on branch banking. The branches of the banks are

in every corner of the country and they have an active role in stimulating the economic growth of

the country. It is very difficult for the CCU or ICCD to scrutinize the activities of every single

branch and hence there is a risk regarding the operation of the branches. In order to reduce that

risk, BFIU has established a Self Assessment Reporting system for the branches.

� According to the instructions of BFIU, branches of our bank need to conduct the Self

Assessment to evaluate them on a half yearly basis. Self Assessment has to be done

through a checklist that is circulated by BFIU Circular no. 10, dated 28/12/2014;

� Before finalizing the evaluation report, there shall have to be a meeting presided over by

the Branch Relationship Manager with all concerned officials of the branch;

� All Questionnaire’s answer of ‘Self Assessment’ relating to ‘Branch’s Present Status’ and

‘Taken Initiative/Recommendation’ should be accurate and relevant;

� In that meeting, there shall be a discussion on the branch evaluation report; if the

identified problems according that report are possible to solve at the branch level, then

necessary actions should be taken without any delay to finalize it; and in the final report,

recommendations shall have to be jotted down;



� In the subsequent quarterly AML/CFT Meetings at the branch, the progress of the related

matters should be discussed;

� After end of every half year, the branch evaluation report along with the measures taken

by the branch in this regard and adopted recommendations regarding the issue should be

submitted to the Internal Control & Compliance Division and the Central Compliance Unit

of Head Office within the 15th of the next month.

12.5.2 Responsibilities of ICCD regarding Independent Testing Procedures

The audit must be independent (i.e. performed by people not involved with the bank’s AML &

CFT compliance). Audit is a kind of assessment of checking of a planned activity. Independent

testing has to be done through a checklist that is circulated by BFIU Circular no. 10, dated

28/12/2014.

� The individuals conducting the audit should report directly to the board of directors/senior

management. Audit function shall be done by the internal audit i.e. Internal Control &

Compliance Division of Head Office. At the same time external auditors could be appointed

(if possible) to review the adequacy of the program.

� The Internal Control & Compliance Division of Head Office shall assess the branch

evaluation report received from the branches and if there is any risky matter realized in any

branch, it shall inspect the branch immediately and shall inform the matter to the CCU.

� While executing inspection/audit activities in various branches according to its own regular

yearly inspection/audit schedule, the Internal Control & Compliance Division should

examine the AML & CFT activities of the concerned branch using the specified checklists for

the Independent Testing Procedure.

� The Internal Control & Compliance Division should send a copy of the report with the rating

of the branches inspected/audited by the Internal Control & Compliance Division to the

CCU of the bank.

� In case of Bank related to Mobile Financial Services and Agent Banking, ICCD will inspect a

minimum 10% Cash Point/Agent of the Bank at yearly basis regarding the compliance

status AML/CFT issues and report will be submitted to CCU.

12.5.3 Responsibilities of Central Compliance Unit’s (CCU) regarding Self Assessment and Independent

Testing Procedures

Based on the received branch evaluation reports from the branches and submitted

inspection/audit reports by the Internal Control & Compliance Division of Head Office, the

Central Compliance Unit shall prepare a checklist based evaluation report on the inspected

branches in a considered half year time. In that report, beside other topics, the following topics

must be included:

(a) Total number of branch and number of self assessment report received from the

branches;

(b) The number of branches inspected/audited by the Internal Control & Compliance Division

at the time of reporting and the status of the branches (branch wise achieved score);

(c) Same kinds of irregularities that have been seen in maximum number of branches

according to the received self assessment report and measures taken by the CCU to

prevent those irregularities.

(d) The general and special irregularities mentioned in the report submitted by the Internal

Control & Compliance Division and the measures taken by the CCU to prevent those

irregularities; and



(e) Measures to improve the ratings by ensuring the compliance activities of the branches

that are evaluated as ‘Unsatisfactory’ and ‘Marginal’ in the received report.

� Based on the validated branch evaluation report received from the branches, if there is any risky

matter realized in any branch, CCU have to initiate to inspect that branch through ICCD and it

should be brought to the notice of the appropriate authorities.

� In case of Bank related to Mobile Financial Services and Agent Banking, CCU will prepare a

Summery Report for Managing Director of the Bank after receiving the report along with lapses/

irregularities of previous year from ICCD in every January of the year. That report along with the

recommendation of Chief Executive should be submitted to the Board of Directors or Higher

Management Committee Meeting. The Annual Report along with Recommendations and taken

initiatives of Chief Executive and Board of Directors or Higher Management Committee should be

submitted to BFIU within February in every year.



CHAPTER 13

Record Keeping

13.1 Legal Obligations

13.1.1 Obligations under MLPA, 2012

The reporting organizations shall have to preserve previous records of transactions of any close

account for at least 5(five) years from the date of such closure and provide with the information

maintained under the clause to Bangladesh Bank.

13.1.2 Obligations under MLP Rules, 2013

The bank shall maintain all necessary records of all transactions, both domestic and international,

for at least five years from the date of the closure of the account or at least five years from the

date of the completion of any one-off transaction in following manners:

a. Transaction records should be sufficient to permit reconstruction of individual transactions

so as to provide, if necessary, evidence for prosecution of criminal activity;

b. The bank shall keep all records obtained through CDD measures, account files and business

correspondence, and results of any analysis undertaken, for at least five years following the

termination of the business relationship or after the date of the occasional transaction;

c. The bank shall ensure that all CDD information and transaction records are available swiftly

to BFIU or available to the respective investigation authority upon appropriate court order.

13.1.3 Obligations under Circulars

According to BFIU Circular-10 dated 28/12/2014:

a. All necessary information/documents of customer's domestic and foreign transactions has

to be preserved for at least 5(five) years after closing the account.

b. 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.

c. All necessary information/documents of a walk-in Customer's transactions has to be

preserved for at least 5 (five) years from the date of transaction.

d. Preserved information has to be sufficient for presenting as a documentary proof for the

judiciary process of the offence.

e. Bank should provide all information and documents collected during CDD along with KYC

procedure and information and documents of transactions as per the instruction or

demand by BFIU.



13.2 Records to be Kept by the Branch

The precise nature of the records required is not specified in the legal and regulatory regime. The

objective is to ensure that a bank meets its obligations and that, in so far as is practicable, in any

subsequent investigation the bank can provide the authorities with its section of the audit trail.

Thus branch should ensure that the records they will keep cover the followings:

i. Customer information

ii. Transactions

iii. Internal and external suspicion reports

iv. Report from CCU/CAMLCO

v. Training and compliance monitoring

vi. Information about the effectiveness of training

13.2.1 Customer Information

Branch will keep a copy of or the references to, the evidence of the customer’s identity obtained

during the application of CDD measures in relation to the evidence of a customer’s identity.

Branch may often hold additional information in respect of a customer obtained for the purposes

of enhanced customer due diligence or ongoing monitoring.

Records of identification evidence must be kept for a period of at least five years after the

relationship with the customer has ended. The date when the relationship with the customer

ends is the date:

� an occasional transaction, or the last in a series of linked transactions, is carried out; or

� the business relationship ended, i.e. the closing of the account or accounts.

13.2.2 Transactions

Branch records shall include:

� All transactions carried out on behalf of or with a customer in the course of relevant

business.

� Transaction records in support of entries in the accounts, in whatever form they are

used, e.g. credit/debit slips, cheques will be maintained in a form from which a

satisfactory audit trail may be compiled where necessary, and which may establish a

financial profile of any suspect account or customer.

� Records of all transactions relating to a customer must be retained for a period of five

years from the date on which the transaction is completed.

13.2.3 Internal and External Suspicion Reports

Branch will make and retain:

� Records of actions taken under the internal and external reporting requirements; and

� When the nominated officer has considered information or other material concerning

possible money laundering but has not made a report to BFIU, a record of the other

material that was considered.

� In addition, copies of any STRs made to the BFIU should be retained for five years.

� Records of all internal and external reports should be retained for five years from the

date the report was made.



13.2.4 Training & Compliance Monitoring

Branch records shall also include:

a. In relation to training:

� dates AML training was given;

� the nature of the training;

� the names of the staff who received training; and

� the results of the tests undertaken by staff, where appropriate.

b. In relation to compliance monitoring:

� reports by the MLRO to senior management; and

� records of consideration of those reports and of any action taken as a

consequence.

13.2.5 Required Files Format for AML/CFT Compliance

i. Account Opening File (with proper record)

ii. KYC & CDD Files:

� KYC Update File for Low Risk A/C

� Student Account Monitoring File

� KYC Update File (A/C openined before 30th April, 2002)

� NID Verification File

iii. Circular Files:

� AML Circular/Instruction Letter File

iv. High Risk, PEPs & IPs Files:

� High Risk Account Listing & Monitoring File

� KYC/TP Update File for High/Low Risk A/C

� PEPs/IPs Monitoring File

v. Sanction Screening Files:

� Sanction Screening File

� (UNSCR, OFAC Hit List)

� Existing A/C False/True Positive Statement

� Local Terrorist Entity List File

� (As per ATA-2013)

� Remittance Screening File

� L/C Beneficiary/Applicant

� (Bank Name, Vessel name etc.)

� SWIFT Screening File

vi. Transaction Monitoring Files:

� Transaction Monitoring File

� Structuring File

� TP Exceed Summery File (Daily & Monthly)

vii. CTR Files:

� CTR Analysis File

� CTR Monitoring Top Customer File



viii. ISAR & STR Files:

� STR Analysis File

� ISAR File

ix. Branch Metting & Minutes Files :

x. Self assessment & independent Files:

xi. Training & Office Order Files:

� BAMLCO Office Order File

� AML/CFT Training Record File

xii. Inspection File:

� Bangladesh Bank AML/CFT Inspection File (if any)

� Head Office AML/CFT Inspection File (if any)

xiii. CCU crrospondent Files:

� Bi-Monthly Reporting File

� Quarterly Meeting Minutes File

� Half Yearly Self Assessment Reporting File

� Independent Testing Procedure File

� Account Inquiry File

xiv. Dormant A/C List File

xv. Closed A/C related File

xvi. Others File (if any)

xvii. Documents:

� Money Laundering Prevention Act 2012

� Money Laundering Prevention (amendment) Act 2015

� Anti Terrorism Act 2009

� Anti Terrorism (amendment) Act 2012

� Anti Terrorism (amendment) Act 2013

� Money Laundering & Terrorist Financing Risk Management Guidelines [Exim

Bank]

� Money Laundering & Terrorist Financing Risk Management Guidelines

[Bangladesh Bank]

• Money Laundering & Terrorist Financing

� Money Laundering & Terrorist Financing Risk Management Guidelines

[Bangladesh Bank]

� Money Laundering & Terrorist Financing Risk Assessment Guidelines (RBA)

� goAML Web Application Manual

� Sanction (UNSCR & OFAC) Screening Manual



13.3 Records to be Kept by Subsidiary

Subsidiaries, if any, shall keep the records of their AML & CFT compliance requirements as specified

in this guidelines and/or circulars of BFIU as per sub-paragraphs 13.2.1 to 13.2.6 of this chapter

which are relevant to them.

13.4 Records to be Kept by Head Office Division

Head Office Division shall keep records of their AML & CFT compliance requirements as specified in

this guidelines and/or circulars of BFIU as per sub-paragraphs 13.2.1 to 13.2.6 of this chapter which

are relevant to them.

13.5 Records to be Kept by CCU

CCU shall keep records of their circulars, guidelines & instructions for implementation &

supervision of AML & CFT compliance program of the bank as specified in this guidelines and/or

circulars of BFIU as per sub-paragraphs 13.2.1 to 13.2.6 of this chapter which are relevant to them.

13.6 Record keeping Formats and Retrieval of Records

To satisfy the requirements of the law and to meet the purpose of record keeping, it is important

that records are capable of retrieval without undue delay. It is not necessary to retain all the

documents relating to customer identity and transaction physically at the premises of the branch of

a financial institution, provided that they have reliable procedures for keeping the hard copy at a

central archive, holding records in electronic form, and that can be reproduced and recollected

without undue delay.

It is not always necessary to retain documents in their original hard copy form, provided that the

firm has reliable procedures for holding records in microchips or electronic form, as appropriate,

and that these can be reproduced without undue delay. In addition, an institution may rely on the

records of a third party, such as a bank or clearing house in respect of details of payments made by

customers. However, the primary requirement is on the institution itself and the onus is thus on

the business to ensure that the third party is willing and able to retain and, if asked to, produce

copies of the records required.

However, the record requirements are the same regardless of the format in which they are kept or

whether the transaction was undertaken by paper or electronic means. Documents held centrally

must be capable of distinguishing between the transactions relating to different customers and of

identifying where the transaction took place and in what form.

--- 0 ---



Abbreviations

A____

AAOIFI = Accounting and Auditing Organization for Islamic Financial Institution

ACU = Asian Clearing Union

ACH = Automated Clearing House

AML/CFT = Anti-Money Laundering/Combating the Financing of Terrorism

AMLD = Anti-Money Laundering Department

AOF = Account Opening Form

APEC = Asia-Pacific Economic Corporation

APGML= Asia Pacific Group on Money Laundering

APT = Asset Protection Trust

ARS = Alternative Remittance Systems

ATA = Anti Terrorism Act

ATM = Automated Teller Machine

B____

BAMLCO = Branch Anti-Money Laundering Compliance Officer

BB = Bangladesh Bank

BCBS = Basel Committee on Banking Supervision

BDT = Bangladesh Taka

BFIU = Bangladesh Financial Intelligence Unit

BHC = Bank Holding Company

BIS = Bank of International Settlements

BMPEA = Black Market Peso Exchange Arrangement

BNI = Bearer-Negotiable Instrument

BO = Beneficial Owner

BPP = Best Practices Paper

BRPD = Banking Regulation & Policy Department

BSA = Bank Secrecy Act

BSAAG = Bank Secrecy Act Advisory Group

BoP = Balance of Payments

BSEC = Bangladesh Security & Exchange Commission

C____

CAMLCO = Chief Anti-Money Laundering Compliance Officer

CAMS = Certified Anti-Money Laundering Specialists

CAP = Customer Acceptance Policy

CCU = Central Compliance Unit

CDD = Customer Due Diligence



CFATF = Caribbean Financial Action Task Force

CFR = Code of Federal Regulations

CHIPS = Clearing House Interbank Payments System

CHFI = Committee on Hemispheric Financial Issues

CIF = Customer Information File

CIP = Customer Identification Procedure

CISADA = Comprehensive Iran Sanctions Accountability and Divestment Act

CMI = Capital Market Intermediaries

CMIR = Report of International Transportation of Currency or Monetary Instruments

CO = Control of Corruption

CTC = Counter Terrorism Committee

CTR = Cash Transaction Report

CTED = Counter Terrorism Executive Directorate

D____

DA = Document against Acceptance

DC = Dual Criminality

DCAMLCO = Deputy Chief Anti-Money Laundering Compliance Officer

DCFCL = Departmental Control Function Checklist

DCN = Document Control Number

DD = Due Diligence

DNFBP = Designated Non-Financial Business and Professions

DOCDEX = Documentary Instruments Dispute Resolution Expertise

DP = Document against Payment

DPEPs = Domestics Politically Exposed Persons

DWT = Domestic Wire Transfer

E____

EAG = Euroasian Anti-Money Laundering Group

E-banking = Electronic Banking

E-cash = Electronic Cash

EDD = Enhanced Due Diligence

EFT = Electronic Funds Transfer

EG = Egmont Group

EGMONT = Egmont Group of Financial Intelligence Units

EPN = Electronic Payments Network

ESAAMLG = Eastern and Southern Africa Anti-Money Laundering Group

EU = European Union



F____

FATF = Financial Action Task Force, 40 Recommendations on Combating Money Laundering and Terrorist

Financing

FAQ = Frequently Asked Question

FBAR = Report of Foreign Bank and Financial Accounts

FFIEC = Federal Financial Institutions Examination Council

FGO = Foreign Gateway Operator

FI = Financial Institution

FIL = Financial Institution Letter

FinCEN = Financial Crimes Enforcement Network

FIU = Financial Intelligence Unit

FPO = Fleet Post Office

FSRB = FATF Style Regional Body

FSAP = Financial Sector Assessment Program

FSF = Financial Stability Forum

FT = Financing of Terrorism

G____

GAFISUD = Financial Action Task Force on Money Laundering in South America

GATT = General Agreements on Tariffs and Trades

GCC = Gulf Cooperation Council

GDP = Gross Domestic Product

GFET = Guidelines for Foreign Exchange Transactions

GIABA = Inter-Governmental Action Group against Money Laundering in West Africa

GPML = Global Program against Money Laundering

H____

HIDTA = High Intensity Drug Trafficking area

HIFCA = High Intensity Financial Crime Area

I____

IAIS = International Association of Insurance Supervisors

IBC = International Business Corporation

ICRG = International Cooperation and Review Group

ICC = International Chamber of Commerce

IFC = International Finance Corporation

IFI = International Financial Institution

IFSB = International Financial Services Board

IFSR = Iranian Financial Sanctions Regulations

ILEA = International Law Enforcement Academy



IMF = International Monetary Fund

IN = Interpretive Note

INCSR = International Narcotic Control Strategic Report

Inco terms = International Commercial Terms

IO = Immediate Outcome

IOIS = International Organization of Insurance Supervisors

IOSCO = International Organization of Securities Commissions

IP = Internet protocol

IPs = Influential Persons

IRGC = International Risk Governance Council

ISBP = International Standard Banking Practices

ITP = Independent Testing Procedure

IVTS = Informal Value Transfer Systems

K____

KYC = Know Your Customer

KYE = Know Your Employee

M____

MER = Mutual Evaluation Report

MENAFATF = Middle East & North Africa Financial Action Task Force

MFS = Mobile Financial Services

MIGS = Multiple Invoicing of Goods & Services

ML = Money Laundering

MLA = Mutual Legal Assistance

MLM = Multi Level Marketing

MLPA = Money Laundering Prevention Act

MNO = Mobile Network Operator

MOU = Memorandum of Understanding

MSB = Money Service Business

MVTS = Money or Value Transfer Service(s)

MVTTS = Money or Value Telegraphic Transfer Services

MONEYVAL = Committee of Experts on the Evaluation of Anti-Money Laundering Measures and Financing

of Terrorism

N____

NBFI = Nonbank Financial Institutions

NCC = National Coordination Committee

NCCT = Non-Cooperative Countries and Territories

NDD = Normal Due Diligence

NGO = Non Government Organization



NPO = Non Profit Organization

NPPS = Net Payment Products and Services

NPLs = Non-Performing Loans

NRTA = Non Resident Taka Account

NRVA = Nationality Risk & Vulnerability Assessment

O____

ODFI = Originating Depository Financial Institution

OECD = Organization for Economic Co-operation and Development of Terrorist Financing.

OFAC = Office of Foreign Assets Control

OFCs = Offshore Financial Centers

OTC = Over the Counter

P____

Palermo Convention = The United Nations Convention against Transnational Organized Crime

PCP = Primary Contact Point

PEPs = Politically Exposed Persons

PO = Predicate Offence

PSD = Payment System Department

P2P = Person to Person

PUPID = Payable Upon Proper Identification

R____

RATFT = Ratifications of International Convention on Terrorism

RATML = Ratifications of International Convention on Money Laundering

RBA = Risk Based Approach

RK = Record Keeping

RMU = Risk Management Unit

RNEFS = Ratio of Net Exports of Financial Services

ROSC = Report on Observance of Standards and codes

RQ = Regulatory Framework Quality

RTGS = Real Time Gross Settlement

S____

SAR = Suspicious Activity Report

SDN List = Specially Designated Nationals List.

SM = Screening Mechanism

SRB = Self-Regulating Bodies

SRO = Self Regulatory Organization

SSN = Social Security Number

STR = Suspicious Transaction Report



SWIFT = Society for Worldwide Interbank Financial Telecommunication

T____

TCSP = Trust and Company Service Provider

Terrorist Financing Convention = The International Convention for the Suppression of the Financing

TF = Terrorist Financing

TMR = Transaction Monitoring & Reporting

TP = Transaction Profile

U____

UCIC = Unique Customer Identification Code

UCPDC = Uniform Customs and Practices for Documentary Credit

UN = United Nations

UNCAC = United Nations Convention Against Corruption

UNODC = United Nations Office of Drugs and Crime

UNSC = United Nations Security Council

UNSCR = United Nations Security Council Resolution

UNSGSA = United Nations Secretary General’s Special Advocate for Inclusive Finance for Development

URC = Uniform Rules for Collections

URR = Uniform Rules for Bank to Bank Reimbursement

URDG = The Uniform Rules for Demand Guarantee

V____

Vienna Convention = The United Nations Convention against Illicit Traffic in Narcotic Drugs and

Psychotropic Substances

W____

WB = World Bank

WEO = World Economic Outlook

WT = Wire Transfer

Wolfsberg Group = The Wolfsberg Group is a private association of eleven (12) global Bank.

-- o --

│1

Annexure- A

RISK REGISTER

1.00: RISK REGISTER FOR BUSINESS RISK

1.01: Risk Register for Customer Related Risks

Sl. No. Risk Factors Likelihood Impact Risk score Treatment/Action

Retail Banking Customer

1.01.01 A new customer Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1

to 4.3.2.20 of this Guidelines;

• Conduct applicable CDD on customer, beneficiary owner(s) and

authorized person(s), if any, as per paragraphs 5.8.1.1 to 5.8.8.3 of this

Guidelines;

• Verify the source of fund as per paragraph 5.8.9 of this Guidelines;

• Screen the customer, beneficiary owner(s) and authorized person(s), if

any, for the sanctions as specified in the paragraphs 9.11.1 to 9.11.12

and do the needful for preventing TF & PF as specified in the paragraph

9.12 of this Guidelines;

• Conduct on-going CDD as per paragraph 5.5 of this Guidelines;

• Monitor the transactions of the account as per chapter 10 of this

Guidelines;

• If any suspicion arises, initiate STR to BFIU through CCU; and

• Ensure all other compliances as per instructions & circulars of BFIU,

CCU & this Guidelines.

1.01.02 Walk-in customer (beneficiary

is government/ semi

government/autonomous

body/bank & NBFI)

Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraph 4.3.1


• Apply CDD measures as indicated in the paragraph 5.8.13 of this

Guidelines;





│2





1.01.03 Walk-in customer (beneficiary

is other than

government/semi

government/autonomous

body/bank & NBFI)

Very likely Major 4 (Extreme) • Follow customer acceptance policy as indicated in the paragraph 4.3.1


• Apply CDD measures as indicated in the paragraph 5.8.13 of this

Guidelines;








1.01.04 Non-resident customer

(Bangladeshi)

Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1



authorized person(s), if any, as per paragraphs 5.8.1.1 to 5.8.8.3 of

this Guidelines;








Guidelines;




│3


1.01.05 A new customer who wants

to carry out a large

transaction (i.e. transaction

above CTR threshold or below

the threshold)

Unlikely Minor 1 (Low) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;


• Identify & justify the large transaction to be carried out;







Guidelines;




1.01.06 A customer making series of

transactions to the same

individual or entity

Likely Major 3 (High) • Ensure that applicable CDD is conducted on customer, beneficiary

owner(s) and authorized person(s), if any, as per paragraphs 5.8.1.1 to

5.8.8.3 of this Guidelines;

• Ensure that source of fund is verified as per paragraph 5.8.9 of this

Guidelines;


Guidelines;

• Collect & preserve complete and accurate information of the individual

or entity to whom series of transactions are made as per paragraph


• Identify & justify the reason(s) of making series of transactions to the

same individuals or entity;

│4


• Screen the customer, beneficiary owner(s), authorized person(s), if

any, & the related individual or entity for the sanctions as specified in

the paragraphs 9.11.1 to 9.11.12 and do the needful for preventing TF

& PF as specified in the paragraph 9.12 of this Guidelines;




1.01.07 Customer involved in

outsourcing business

Likely Major 3 (High) • Ensure that applicable CDD is conducted on customer, beneficiary




Guidelines;

• Maintain enhanced due diligence (EDD) as per paragraph 5.6 of this

Guidelines;


• Identify & verify nature of business & justify the transactions with the

business.

• Screen the customer, beneficiary owner(s) , authorized person(s), if

any, and his/her outsourcing counterpart(s) for the sanctions as

specified in the paragraphs 9.11.1 to 9.11.12 and do the needful for

preventing TF & PF as specified in the paragraph 9.12 of this

Guidelines;


Guidelines;




│5


1.01.08 Customer appears to do

structuring to avoid reporting

threshold

Very Likely Major 4 (Extreme) • Ensure that applicable CDD is conducted on customer, beneficiary




Guidelines;


Guidelines;






Guidelines;

• If any suspicion or inconsistency arises, initiate STR to BFIU through

CCU; and



1.01.09 Customer appears to have

accounts with several banks

in the same area

Very Likely Major 4 (Extreme) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;



Guidelines;







Guidelines;

│6



CCU; and



1.01.10 Customer who shows

curiosity about internal

systems, controls and policies

on internal and regulatory

reporting





Guidelines;



Guidelines;





• If the customers do not cooperate, initiate STR to BFIU through CCU;

and



1.01.11 Customer is the subject of a

Money Laundering or

Financing of Terrorism

investigation by the order of

the court





Guidelines;



Guidelines;






│7



Guidelines; and



1.01.12 Negative news about the

customers’ activities/business

in media or from other

reliable sources





Guidelines;



Guidelines;







Guidelines;


CCU; and



1.01.13 Customer is secretive and

reluctant to meet in person

Likely Major 3 (High) • Apply CDD measures as indicated in the paragraph 5.8.14 of this

Guidelines;




9.12 of this Guidelines; and



│8


1.01.14 Customer is a mandate who is

operating account on behalf

of another person/ company

Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1


• Conduct applicable CDD on customer, mandate and beneficiary

owner(s) as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;







Guidelines;


CCU; and



1.01.15 Large deposits in the account

of customer with low income

Very Likely Major 4 (Extreme) • Ensure that applicable CDD is conducted on customer, beneficiary




Guidelines;


Guidelines;

• Identify & justify the reason(s) of the large deposit in the account;






Guidelines;

│9



CCU; and



1.01.16 Customers about whom BFIU

seeks information (individual)





Guidelines;



Guidelines;

• Identify reasons behind the ground for which BFIU seeks information;







Guidelines;

• If any suspicion or inconsistency arises, submit STR to BFIU through

CCU; and



1.01.17 A customer whose

identification is difficult to

Check



• If it is not possible to conduct applicable CDD as per paragraphs 5.8.1.1

to 5.8.8.3, apply CDD measures as per paragraph 5.8.12 of this

Guidelines;



Guidelines;

│10








Guidelines;


CCU; and



1.01.18 Significant and unexplained

geographic distance between

the bank and the location of

the customer





Guidelines;



Guidelines;

• Identify & justify the reasons behind the ground for selecting the

respective branch;







Guidelines;


CCU; and



│11


1.01.19 Customer is a foreigner Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraph 4.3.1



authorized person(s), if any, as per paragraphs 5.8.1 & 5.8.16 of this

Guidelines;



Guidelines;

• Comply all provisions of Foreign Exchange Regulation Act, 1947 and

issued guidelines, circulars, rules and regulations by Bangladesh Bank

under this act.







Guidelines;


CCU; and



1.01.20 Customer is a minor Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraphs

4.3.1 to 4.3.2.20 of this Guidelines;

• Conduct applicable CDD on guardian, minor, beneficiary owner(s) and

authorized person(s), if any, as per paragraph 5.8.1 of this Guidelines;


• Screen the guardian, beneficiary owner(s) and authorized person(s), if





Guidelines;

│12



CCU; and



1.01.21 Customer is Housewife Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1


• Conduct applicable CDD on housewife customer, beneficiary owner(s)

and authorized person(s), if any, as per paragraph 5.8.1 of this

Guidelines;

• Give emphasis on KYC & CDD of beneficiary owner(s);



Guidelines;







Guidelines;


CCU; and



│13


1.01.22 Customers that are politically

exposed persons (PEPs) or

influential persons (IPs) or

chief/senior officials of

international organizations

and their family members

and close associates



• Apply applicable CDD measures as indicated in the paragraph 5.8.16 to

5.8.19 of this Guidelines;







1.01.23 Customer opens account in

the name of his/her family

member who intends to

credit large amount of

deposits





Guidelines;




Guidelines;

• Identify & justify the reason(s) of depositing large amount to the

account;







Guidelines;


CCU; and



│14


1.01.24 Customers doing significant

volume of transactions with

higher-risk geographic

locations





Guidelines;

• Apply additional CDD measures as specified in the paragraph 5.8.22 for

high risk countries;




Guidelines;







Guidelines;


CCU; and



1.01.25 A customer who brings in

large amounts of used notes

and/or small denominations

Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the

paragraph 4.3.1 to 4.3.2.20 of this Guidelines;

• Ensure that applicable CDD is conducted on customer, beneficiary




Guidelines;


Guidelines;

│15


• Identify & justify the reason(s) of the bringing in the large amounts of

used notes and/or small denominations;






Guidelines;


CCU; and



1.01.26 Customer dealing in high

value or precious goods (e.g.

jewel, gem and precious

metals dealers, art and

antique dealers and auction

houses, estate agents and

real estate brokers)





Guidelines;




Guidelines;







Guidelines;


CCU; and



│16


1.01.27 Customer is a money

changer/courier service

agent/travel agent





Guidelines;




Guidelines;







Guidelines;


CCU; and



1.01.28 Customer is involved in

business defined as high risk

in KYC profile by BFIU, but not

mentioned above





Guidelines;




Guidelines;

│17








Guidelines;


CCU; and



1.01.29 Customer is involved in

Manpower Export Business





Guidelines;




Guidelines;







Guidelines;


CCU; and



│18


1.01.30 Customer has been refused

to provide banking facilities

by another bank





Guidelines;




Guidelines;

• Identify & justify the reason(s) of refusal by another bank;







Guidelines;


CCU; and



1.01.31 Accounts opened before 30

April, 2002

Likely Moderate 2 (Medium ) • Apply applicable CDD measures as indicated in the paragraph 5.8.21 of

this Guidelines if KYC & CDD are completed properly;





• Try to communicate with the customer for updating/completing KYC &

applicable CDD on customer, beneficiary owner(s) and authorized

person(s), if any, as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;

and



│19


1.01.32 Customers with complex

accounting and huge

transaction







Guidelines;


Guidelines;

• Identify & justify the reason(s) of complex accounting and huge

transactions;






Guidelines;


CCU; and



1.01.33 Receipt of donor fund , fund

from foreign source by micro

finance institute (MFI)

Very Likely Major 4 (Extreme) • Ensure that customer acceptance policy is followed as indicated in the






Guidelines;

• Give emphasis on KYC & CDD of beneficiary owner(s)


Guidelines;

│20


• Identify & verify the approval from competent authority, if any, for

receipt & use of donor fund or fund from foreign sources;

• Screen the customer, beneficiary owner(s), donor(s), and authorized

person(s), if any, for the sanctions as specified in the paragraphs 9.11.1

to 9.11.12 and do the needful for preventing TF & PF as specified in the

paragraph 9.12 of this Guidelines;


Guidelines;


CCU; and



1.01.34 Customer which is a reporting

organization under MLP Act

2012 appears not complying

with the reporting

requirements (MFI) as per

reliable source







Guidelines;

• Give emphasis on KYC & CDD of beneficiary owner(s)


Guidelines;






Guidelines;


CCU; and



│21


Wholesale Banking Customer

1.01.35 Entity customer having

operations in multiple

locations





Guidelines;

• Give emphasis on KYC & CDD of owners/directors & beneficiary

owner(s);



Guidelines;

• Identify & justify the reason(s) of having operations in multiple

locations;







Guidelines;


CCU; and



1.01.36 Customers about whom BFIU

seeks information (large

corporate)



• Conduct applicable CDD on customer, owners/directors, beneficiary




owner(s);

│22




Guidelines;

• Identify the reason(s) of seeking information by the BFIU;

• Screen the customer, owners/directors, beneficiary owner(s) and

authorized person(s), if any, for the sanctions as specified in the

paragraphs 9.11.1 to 9.11.12 and do the needful for preventing TF & PF

as specified in the paragraph 9.12 of this Guidelines;



Guidelines;


CCU; and



1.01.37 Owner of the entity that are

Influential Persons (IPs) and

their family members and

close associates







• Apply applicable CDD measures as indicated in the paragraphs 5.8.17

& 5.8.19 of this Guidelines for IPs & their family members;






│23



Guidelines;


CCU; and





transaction. (i.e. transaction

amounting 10 million or

above)






• Give emphasis on KYC & CDD of directors/owners & beneficiary

owner(s);



Guidelines;

• Identify & justify the reason(s) of depositing large amount to the

account;







Guidelines;


CCU; and



│24


1.01.39 A customer or a group of

customers making lots of

transactions to the same

individual or group

(wholesale)



• Ensure that applicable CDD is conducted on customer,

owners/directors, beneficiary owner(s) and authorized person(s), if

any, as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;


Guidelines;

• Collect & preserve complete and accurate information of the

individuals or entities to whom lots of transactions are made as per

paragraph 5.8.13 of this guidelines;

• Identify & justify the reason(s) of making series of transactions to the

same individuals or entities;

• Screen the customer, owners/directors, beneficiary owner(s),

authorized person(s), if any, & the related individuals and/or entities

for the sanctions as specified in the paragraphs 9.11.1 to 9.11.12 and

do the needful for preventing TF & PF as specified in the paragraph




Guidelines;




1.01.40 A customer whose

identification is difficult to

check







owner(s);



Guidelines;

│25


• Find out the identification difficulties and seek advices from the senior

management at Head Office;







Guidelines;


CCU; and



1.01.41 Owner of the entity that are

Politically Exposed Persons

(PEPs) or chief/senior officials

of International Organizations

and their family members

and close associates







• Apply applicable CDD measures as indicated in the paragraphs 5.8.16,

5.8.18 & 5.8.19 of this Guidelines for PEPs & others;







Guidelines;

│26



CCU; and



1.01.42 Charities or NPOs (especially

operating in less privileged

areas)

Likely Major 3 (High) • Follow the customer acceptance policy as indicated in the paragraph


• Conduct applicable CDD on customer, members of managing

committee, beneficiary owner(s) and authorized person(s), if any, as

per paragraphs 5.8.8.1 to 5.8.8.3 of this Guidelines;


Guidelines;

• Give emphasis on KYC & CDD of members of managing committee &

beneficiary owner(s);


Guidelines;

• Identify & verify the approval from competent authority, if any, for

receipt & use of donor fund or fund from foreign sources, if any;

• Screen the customer, members of managing committee, beneficiary

owner(s), donor(s), and authorized person(s), if any, for the sanctions

as specified in the paragraphs 9.11.1 to 9.11.12 and do the needful for


Guidelines;


Guidelines;


CCU; and



│27


Credit Card Customer

1.01.43 Customer who changes static

data frequently



• Conduct general CDD measures as per paragraphs 8.3.1 to 8.3.10 &

specific CDD measures as per paragraph 8.4.1 of this Guidelines on

customer, beneficiary owner(s), authorized person(s), if any, agent(s),if

any, distributor(s), if any, merchant(s) and/or any other third party

related to credit card services;


Guidelines;


Guidelines;


any, agent(s),if any, distributor(s), if any, merchant(s) and/or any other

third party related to credit card services for the sanctions as specified

in the paragraphs 9.11.1 to 9.11.12 and do the needful for preventing

TF & PF as specified in the paragraph 9.12 of this Guidelines;


Guidelines;


CCU; and



1.01.44 Credit Card customer Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the



specific CDD measures as per paragraph 8.4.1 for credit Card of this

Guidelines on customer, beneficiary owner(s), authorized person(s), if


third party related to credit card services;

│28



Guidelines;







Guidelines;


CCU; and



1.01.45 Customer doing frequent

transaction through card

(Prepaid & Credit card) and

making quick adjustments




specific CDD measures as per paragraphs 8.4.1 & 8.4.4 of this





Guidelines;


Guidelines;







Guidelines;


CCU; and

│29




1.01.46 Prepaid Card customer Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the



specific CDD measures as per paragraph 8.4.4 of this Guidelines on

customer, beneficiary owner(s), authorized person(s), if any, agent(s),if

any, distributor(s), if any, merchant(s) and/or any other third party

related to credit card services;


Guidelines;







Guidelines;


CCU; and



International Trade Customer

1.01.47 A new customer (Outward

remittance-through SWIFT)


paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of opening

account or establishing relationship or in case of walk-in customer;



any, as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines at the time

of opening account or establishing relationship, if required;

│30


• Conduct applicable CDD measures for wire transfer as specified in the

paragraphs 6.2.1 to 6.5.5 of this guidelines;


Guidelines, if applicable;


Guidelines, if required;

• Screen the persons and/or entities appearing in the SWIFT message

related to wire transfer as specified in the paragraphs 9.11.1 to 9.11.12




Guidelines;


CCU; and

• Ensure all other compliances as per instructions & circulars of

Bangladesh Bank, BFIU, CCU & this Guidelines.

1.01.48 A new customer

(Import/Export)



account or establishing relationship;




of opening account or establishing relationship;

• If the customer is related to import business, conduct additional

applicable general CDD measures as per paragraphs 7.4.1 to 7.4.9 &

specific CDD measures as per paragraphs 7.5.1 to 7.5.3.6 of this

Guidelines on customer, their business, counter parties, third parties,

goods & services involved, country etc.;

• If the customer is related to export business, conduct additional





│31



Guidelines;

• Maintain enhanced due diligence (EDD) as per paragraphs 5.6 &

7.5.3.2(c) of this Guidelines, if required;

• Screen the persons, entities, third parties, goods, country, ports, point

of transshipment, carrier, master, agents and/or any other names or

entities appearing in sales contract, LC, documents presented and/or

SWIFT message related to trade transactions as specified in the




Guidelines;


CCU; and



1.01.49 A new customer (Inward

remittance-through SWIFT)














│32







Guidelines;


CCU; and





transaction (Import/Export)



















7.5.3.2(c) of this Guidelines;

• Give emphasis to check that the type, quantity and value of goods are

consistent with the known business of importer and/or supplier;

│33



Guidelines;








Guidelines;


CCU; and





transaction (Inward/outward

remittance)








• Identify & verify the reasons of carrying out large transactions;




Guidelines;


Guidelines;





│34



Guidelines;


CCU; and



1.01.52 A customer wants to conduct

business beyond its line of

business

(import/export/remittance)








• If the transaction is related to remittance, conduct applicable CDD

measures for wire transfer as specified in the paragraphs 6.2.1 to 6.5.5

of this guidelines;












7.5.3.2( C ) (for export & import) of this Guidelines;

• Give emphasis to check that the type, quantity and value of goods are

consistent with the known business of the counterpart;


Guidelines;

│35





SWIFT message related to trade transactions or related to wire transfer



Guidelines;


Guidelines;


CCU; and



1.01.53 Owner/director/shareholder

of the customer is influential

person(s) or their family

members or close associates







• Apply applicable CDD measures as indicated in the paragraphs 5.8.16,

5.8.18 & 5.8.19 of this Guidelines for PEPs & others;



of this guidelines;











│36





SWIFT message related to trade transactions or related to wire transfer



Guidelines;


Guidelines;


CCU; and



1.01.54 Correspondent Banks Very Likely Major 4 (Extreme) • Follow customer acceptance policy as indicated in the paragraph


• Conduct applicable CDD on foreign correspondent or respondent bank,

owners/directors, beneficiary owner(s), authorized person(s), if any,

customers of foreign correspondent or respondent bank, if required,

as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;

• Apply applicable CDD measures as indicated in the paragraph 5.8.15

of this Guidelines for correspondent banking;

• Screen names of the foreign correspondent or respondent bank,


customers of foreign correspondent or respondent bank, if required,

and/or any other names or entities appearing in the process of

establishing corresponding relationship as specified in the paragraphs

9.11.1 to 9.11.12 and do the needful for preventing TF & PF as

specified in the paragraph 9.12 of this Guidelines;


Guidelines;

│37



CCU; and



1.01.55 Money services businesses

(remittance houses, exchange

houses)

Very Likely Major 4 (Extreme) • Follow customer acceptance policy as indicated in the paragraph


• Conduct applicable CDD on MVTS providers such as remittance houses,

exchange houses, etc. , their agents or sub-agents, if any,


and customers of MVTS providers, if required, as per paragraphs

5.8.1.1 to 5.8.8.3 of this Guidelines;

• Apply applicable CDD measures as indicated in the paragraphs 6.6.3 &

6.6.4 of this Guidelines for money or value transfer services (MVTS);

• Screen names of the MVTS providers such as remittance houses,

exchange houses, etc. , their agents or sub-agents, if any,


customers of MVTS providers, if required, applicant/originator,

beneficiary and/or any other names or entities appearing in the

process of delivering MVTS as specified in the paragraphs 9.11.1 to

9.11.12 and do the needful for preventing TF & PF as specified in the



Guidelines;


CCU; and



│38

2. Risk Register for Products & Services (All the products and services of a bank has to be included here)


Retail Banking Product

2.01.01 Accounts for students where

large amount of transactions

are made (student file)



• Conduct applicable CDD on customer, his/her parents/guardian(s),

beneficiary owner(s) and authorized person(s), if any, as per

paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;

• Give emphasis on KYC & CDD of parents/guardian(s), beneficiary

owner(s) and authorized person(s), if any;

• Verify the source of fund of parents/guardian(s), beneficiary owner(s)

and authorized person(s), if any as per paragraph 5.8.9 of this

Guidelines;


Guidelines;

• Identify & justify the reason(s) of carrying out large transactions to the

account;

• Screen the customer, parents/guardian(s), beneficiary owner(s) and






Guidelines;


CCU; and



│39


2.01.02 Gift Cheque Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1


• If applicable, ensure that applicable CDD measures are conducted on

customer, beneficiary owner(s) and authorized person(s), if any, as per


• If applicable, conduct CDD measures for walk-in customers as specified

in the paragraph 5.8.13 of this guidelines;

• Verify the source of fund per paragraph 5.8.9 of this Guidelines;






CCU; and



2.01.03 Locker Service Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1







• Verify the source of fund per paragraph 5.8.9 of this Guidelines;


Guidelines;





│40



CCU; and



2.01.04

Foreign currency

endorsement in Passport








• Collect & verify photo copies of passport, Visa & air/railway/bus ticket;

• Comply FERA 1947 & Bangladesh Bank Guidelines, circulars and

instructions issued under FERA 1947;






CCU; and



2.01.05 Large transaction in the

account of under privileged

people





Guidelines;

• Give emphasis on KYC & CDD of beneficiary owner(s) and authorized

person(s), if any;

• Verify the source of fund of the customer, beneficiary owner(s) and



Guidelines;

│41


• Identify & justify the reason(s) of carrying out large transactions to the

account;







Guidelines;


CCU; and



2.01.06 FDR ( less than 2 million) Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;








CCU; and



│42


2.01.07 FDR (2 million and above) Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;




Guidelines;






CCU; and



2.01.08 Special scheme deposit

accounts opened with big

installment and small tenure





Guidelines;

• Give emphasis on KYC & CDD of beneficiary owner(s) and authorized

person(s), if any;




Guidelines;





│43



CCU; and



2.01.09 Multiple deposit scheme

accounts opened by same

customer in a branch





Guidelines;








CCU; and



2.01.10 Multiple deposit scheme

accounts opened by same

customer from different

location





Guidelines;




Guidelines;





│44



CCU; and



2.01.11 Open DPS in the name of

family member Or

Installments paid from the

account other than the

customer’s account





Guidelines;

• Ensure that applicable CDD measures are conducted on installment

paying account holder as per paragraphs 5.8.1.1 to 5.8.8.3 of this

Guidelines;

• Also ensure that source of fund of installment paying account holder is

verified as per paragraph 5.8.9 of this Guidelines;




any, and installment paying account holder for the sanctions as



Guidelines;



CCU; and



│45


2.01.12 Stand alone DPS Likely Moderate 2 (Medium ) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;








CCU; and



2.01.13 Early encashment of FDR,

special scheme etc.

Likely Moderate 2 (Medium ) • Ensure that customer acceptance policy is followed as indicated in the


• Ensure that applicable CDD measures are conducted on customer,



• Ensure that the source of fund of the customer is verified as per

paragraph 5.8.9 of this Guidelines;

• The customer, beneficiary owner(s) and authorized person(s), if any,

are screened for the sanctions as specified in the paragraphs 9.11.1 to

9.11.12 for preventing TF & PF;

• Identify & justify the reasons of early encashment;


CCU;

• Preserve the records as specified in the record keeping chapter 13; and



│46


2.01.14 Non face to face business

relationship /transaction



• Apply CDD measures of non face to face customers as indicated in the







CCU; and



2.01.15 Payment received from

unrelated/un- associated

third parties








• Conduct applicable CDD measures on unrelated/un-associated third

parties as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;

• Try to verify the source of fund of the unrelated/un-associated third

parties as per paragraph 5.8.9 of this Guidelines;

• Maintain enhanced due diligence (EDD) on customer as per paragraph


• Screen the names of the customer, unrelated/un-associated third

parties, beneficiary owner(s) and authorized person(s), if any, as

specified in the paragraphs 9.11.1 to 9.11.12 for preventing TF & PF;

• Identify & justify the reasons of involvement of unrelated/un-

associated third parties in the transaction;


Guidelines;

│47



CCU;



Retail Privilege Facilities

2.01.16 Pre- Approved Credit Card

with BDT 300K limit









Guidelines;







Guidelines;


CCU; and



│48


2.01.17 Enhanced ATM cash

withdrawal Limit BDT 100K




specific CDD measures as per paragraph 8.4.5 for ATM of this



third party related to ATM services;


Guidelines;







Guidelines;


CCU; and



SME Banking Product

2.01.18 Want to open FDR where

source of fund is not clear





Guidelines;



• Maintain applicable enhanced due diligence (EDD) on customer as per


│49







CCU; and



2.01.19 Early encashment of FDR Likely Moderate 2 (Medium ) • Ensure that customer acceptance policy is followed as indicated in the










• Identify & justify the reasons of early encashment;


CCU;

• Preserve the records as specified in the record keeping chapter 13; and



2.01.20 Repayment of loan EMI from

source that is not clear






paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines at the time of opening


│50



paragraph 5.8.9 of this Guidelines at the time of opening account or

establishing relationship;

• Ensure that the investment approval & documentations are duly

completed;

• Identify & verify Source of fund used as security/margin, if any, at the

time of availing investment;

• Ensure the utilization of investment in the sector as specified in the

Head Office approval;

• Identify & verify the source of repayment and confirm that source of

repayment is consistent with known source of fund;

• Comply BB Investment/credits related circulars as well as our banks’

credit policy;




• Maintain applicable enhanced due diligence (EDD) as per paragraph



CCU;



2.01.21 Repayment of full loan

amount before maturity











│51



completed;








credit policy;







CCU;

• Maintain the records as specified in the chapter 13 of this guidelines;



2.01.22 Loan amount utilized in

sector other than the sector

specified during availing the

loan












completed;

│52




• Identify & verify the reasons of utilizing investment amount in the

sector other than the sector specified in Head Office approval;




credit policy;







CCU;



2.01.23 In case of fixed asset

financing, sale of asset

purchased immediately after

repayment of full investment

amount












completed;




Head Office approval.

│53


• Identify & verify the reasons of sale of fixed asset immediately after the

full repayment of the investment amount;




credit policy;







CCU;



2.01.24 Source of fund used as

security not clear at the time

of availing investment












completed;




credit policy;

│54










CCU;



Wholesale Banking Product

2.01.25 Development of new product

& service of bank

Likely Major 3 (High) • Before launching do the research to identify risks and suggest

commensurate CDD measures to mitigate the risks;

• Follow customer acceptance policy as indicated in the paragraph 4.3.1


• Conduct additional applicable CDD on customer, beneficiary owner(s)

and authorized person(s), if any, as specified in this Guidelines;







2.01.26 Payment received from

unrelated third parties




• Ensure that applicable CDD measures are conducted on beneficiary




│55


• Ensure that the source of fund of the beneficiary customer is verified

as per paragraph 5.8.9 of this Guidelines at the time of opening


• If beneficiary customer is a walk-in customer, conduct CDD measures

as indicated in the paragraph 5.8.13 of this Guidelines;

• If applicable, Conduct required CDD measures on unrelated third

parties as per paragraphs 5.8.1.1 to 5.8.8.3 of this Guidelines;

• Try to verify the source of fund of the unrelated/un-associated third

parties as per paragraph 5.8.9 of this Guidelines;

• Maintain applicable enhanced due diligence (EDD) on beneficiary

customer as per paragraph 5.6 of this Guidelines;

• Screen the names of the customer, unrelated third parties, beneficiary

owner(s) and authorized person(s), if any, as specified in the

paragraphs 9.11.1 to 9.11.12 for preventing TF & PF;

• Identify & justify the reasons of involvement of unrelated third parties

in the transaction;


Guidelines;


CCU;



2.01.27 High Value FDR Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraph 4.3.1




Guidelines;





│56







CCU; and



2.01.28 Term loan, SOD(FO), SOD(G-

work order), SOD(Garment),

SOD(PO), Loan General,

Lease finance, Packing Credit,

BTB L/C











• Check customers background, assess borrowers net worth & actual

fund requirements and Identify purpose of loan/investment;


completed;








credit policy;

│57






CCU;



2.01.29 BG(bid bond), BG(PG),

BG(APG)











requirements of the customer;

• Identify & verify the purpose of Bank Guarantee(BG);

• Collect required documents to identify the underlying transaction of

the BG & verify it;

• Ensure that Head Office approval & required documentations are duly

completed;


time of availing BG;

• Ensure the utilization of BG in the sector as specified in the Head

Office approval;

• Identify & verify the reason(s) of claim/encashment guarantee, if any;

• Comply BB BG and/or Investment/credits related circulars as well as

our banks’ BG/credit policy, if any;




│58



CCU;



2.01.30 L/C subsequent term

investment, DP L/C








• Conduct additional applicable general CDD measures as per

paragraphs 7.4.1 to 7.4.9 & specific CDD measures as per paragraphs

7.5.1 to 7.5.3.6 of this Guidelines on customer, their business, counter

parties, third parties, goods & services involved, country etc. for import

business;


Guidelines at the time of opening account or establishing relationship;




completed;








credit policy;

│59









Guidelines;


CCU; and



2.01.31 C.C(H), SOD(G-Business), STL Likely Moderate 2 (Medium ) • Ensure that customer acceptance policy is followed as indicated in the













completed;







│60



credit policy;





CCU;



2.01.32 OBU Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the


















Guidelines;




completed;

│61






• Comply BB OBU related circulars as well as our banks’ credit

policy/circulars;








Guidelines;


CCU; and



2.01.33 Syndication Financing Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the













completed;

│62








• Comply other requirements as specified in the BB circulars & our

banks’ credit policy/circulars related to syndication financing as well as

general Investment/credits;





CCU;



Credit Card

2.01.34 Supplementary Credit Card

Issue


paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of issuing

card;


specific CDD measures as per paragraphs 8.4.1 or 8.4.3 or 8.4.4 of this

Guidelines on customer, supplementary card holder, beneficiary

owner(s), authorized person(s), if any, agent(s),if any, distributor(s), if

any, merchant(s) and/or any other third party related to card services;


Guidelines at the time of issuing card;

• Identify & verify the relationship of card holder with supplementary

card holder,

│63


• Screen the customer, supplementary card holder, beneficiary

owner(s), authorized person(s), if any, agent(s),if any, distributor(s), if

any, merchant(s) and/or any other third party related to credit card

services for the sanctions as specified in the paragraphs 9.11.1 to

9.11.12 and do the needful for preventing TF & PF as specified in the



Guidelines;


CCU; and



2.01.35 Frequent use of Card I/O

Cheque





specific CDD measures as per paragraphs 8.4.1 or 8.4.3 or 8.4.4 of this





Guidelines;









Guidelines;

│64



CCU; and



2.01.36 BEFTN cheque or pay order as

mode of payment instead of

account opening at bank

(Merchant)

Most

Likely

Major 4 (Extreme) • Ensure that customer acceptance policy is followed as indicated in the



• Ensure that general CDD measures as per paragraphs 8.3.1 to 8.3.10

& specific CDD measures as per paragraph 8.4.7 of this Guidelines for

POS are conducted on customer, beneficiary owner(s), authorized

person(s), if any, agent(s),if any, distributor(s), if any, merchant(s)

and/or any other third party related to credit card services;

• Ensure that source of fund of the merchant is verified as per paragraph

5.8.9 of this Guidelines;









Guidelines;


CCU; and



│65


2.01.37 Credit card issuance against

ERQ and RFCD accounts








• Comply BB guidelines & circulars of issuance of credit card against ERQ

and RFCD accounts;







Guidelines;


CCU; and



International Trade

2.01.38 Line of business mismatch














│66









• Maintain applicable enhanced due diligence (EDD) as per paragraphs

5.6 & 7.5.3.2(c) of this Guidelines;








Guidelines;


CCU; and



2.01.39 Under/Over invoicing


Most

Likely

Major 4 (Extreme) • Ensure that customer acceptance policy is followed as indicated in the







│67














• Ensure that the price of the commodity or service is internationally

competitive;


5.6 & 7.5.3.2(c) of this Guidelines, if required;








Guidelines;


CCU; and



2.01.40 Retirement of import bills in

cash





│68






• Ensure that additional applicable general CDD measures as per



parties, third parties, goods & services involved, country etc. are

conducted at the time of opening LC or issuing LCAF for import;



• Identify & verify Source of fund used for cash retirement of import bill;








Guidelines;


CCU; and



2.01.41 Wire transfer Very Likely Major 4 (Extreme) • Ensure that customer acceptance policy is followed as indicated in the






of opening account or establishing relationship, if applicable;

│69





5.6 of this Guidelines, if required;



• If any of the parties of the wire transfer falls in the high risk countries

for ML & FT, conduct applicable CDD measures as specified in the







Guidelines;


CCU; and



2.01.42 Relationship between the

remitter and beneficiary and

purpose of remittance

mismatch (outward/inward

remittance)







of opening account or establishing relationship, if applicable;







│70


• If any of the parties of the wire transfer falls in the high risk countries

for ML & FT, conduct applicable CDD measures as specified in the







Guidelines;


CCU; and



3. Risk Register for Business practices/delivery methods or channels

3.01.01 Online (multiple small

transaction through different

branch)

Likely Moderate 3 (High) • Ensure that customer acceptance policy is followed as indicated in the







• Conduct applicable CDD measures for online transactions as specified

in the paragraph 5.8.13(e) of this guidelines;





• Ensure that the name of the customer, owners/directors, beneficiary

owner(s) and authorized person(s), if any, are screened as specified in

the paragraphs 9.11.1 to 9.11.12 and done the needful for preventing



│71



Guidelines;


CCU; and



3.01.02 BEFTN Likely Moderate 3 (High) • Maintain proper customer due diligence (CDD)

• KYC of the depositor or withdrawer (other than account holder)

• Monitor frequency transactions of the account

• If frequency, identify causes of transactions.

• Justify with customer’s profession & apply enhanced due diligence

(EDD) if necessary.

3.01.03 BACH Likely Moderate 3 (High) • Maintain proper customer due diligence (CDD)

• KYC of the depositor or withdrawer (other than account holder)

• Monitor frequency transactions of the account

• If frequency, identify causes of transactions.

• Justify with customer’s profession & apply enhanced due diligence

(EDD) if necessary.

3.01.04 IDBP Likely Major 3 (High) • Ensure that customer acceptance policy is followed as indicated in the







• Conduct additional applicable general CDD measures as per



parties, third parties, goods & services involved, country etc. as export

business;



│72


• Ensure that the price of the local supply is internationally and/or

domestically competitive;

• Ensure that goods or services are delivered as specified in the sales

contract and/or Local LC;


5.6 & 7.5.3.2(c) of this Guidelines, if required;

• Screen the persons, entities, third parties, goods, agents and/or any

other names or entities appearing in sales contract, LC, documents

presented and/or SWIFT message related to trade transactions as



Guidelines;


Guidelines;


CCU; and



3.01.05 Mobile Banking Likely Major 3 (High) • Follow the customer acceptance policy as indicated in the paragraphs


• Conduct CDD measures for mobile banking as per paragraphs 8.3.1 to

8.3.10 & 8.4.2 of this Guidelines;




• Screen the names of customer, beneficiary owner(s), authorized

person(s), if any, distributor(s), merchant(s), agent(s) and/or any other

names or entities appearing in course of delivery of mobile banking

services as specified in the paragraphs 9.11.1 to 9.11.12 and do the

needful for preventing TF & PF as specified in the paragraph 8.12 of

this Guidelines;


Guidelines;

│73



CCU; and



3.01.06

Third party agent or broker Likely Major 3 (High) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1


• Conduct applicable CDD on agent customer or broker customer,




• Screen the agent customer or broker customer, beneficiary owner(s)

and authorized person(s), if any, for the sanctions as specified in the





Guidelines;




Credit Card

3.01.07 New Merchant sign up Likely Major 3 (High) • Follow the customer acceptance policy as indicated in the paragraphs


• Conduct CDD measures for POS (new merchant) as per paragraphs

8.3.1 to 8.3.10 & 8.4.7 of this Guidelines;




• Screen the names of customer/new merchant, beneficiary owner(s),

authorized person(s), if any,) and/or any other names or entities

appearing in the contract/agreement with new merchant as specified



│74



Guidelines;


CCU; and



3.01.08 High volume transaction

through POS



account or establishing relationship or signing agreement with

merchant;

• Ensure that applicable CDD measures for POS are conducted as per

paragraphs 8.3.1 to 8.3.10 & 8.4.7 of this Guidelines at the time of

opening account or establishing relationship or signing agreement with

merchant;


Guidelines at the time of opening account or establishing relationship

or signing agreement with merchant;

• Identify & verify the reason(s) of high volume transaction through an

POS;



• Ensure that the names of customer/new merchant, beneficiary

owner(s), authorized person(s), if any,) and/or any other names or

entities appearing in the contract/agreement with merchant are

screened as specified in the paragraphs 9.11.1 to 9.11.12 and done the

needful for preventing TF & PF as specified in the paragraph 8.12 of

this Guidelines;


Guidelines;

│75


• If any suspicion or inconsistency arises, take required action

immediately and initiate STR to BFIU through CCU; and



Alternate Delivery Channel

3.01.09 Large amount withdrawn

from ATMs

Likely Major 3 (High) • Ensure that applicable CDD measures for ATM are conducted as per


• Monitor the transactions through ATM on 24/7 basis and identify &

confirm that the large amount withdrawal from ATM is made by the

customer and the transaction is consistent with the approved limit;

• Ensure that customer acceptance policy is followed as indicated in the

paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of issuing card

or establishing relationship;

• Ensure that applicable CDD measures for issuing cards are conducted

as per paragraphs 8.3.1 to 8.3.10, 8.4.1, 8.4.3 & 8.4.4 of this Guidelines

at the time of issuing card or establishing relationship;



• Ensure that the names of customer, beneficiary owner(s), authorized

person(s), if any, are screened as specified in the paragraphs 9.11.1 to

9.11.12 and done the needful for preventing TF & PF as specified in the



Guidelines;





│76


3.01.10 Larger amount transaction

from different location and

different time(mid night)

through ATM

Likely Major 3 (High) • Ensure that applicable CDD measures for ATM are conducted as per


• Monitor the transactions through ATM on 24/7 basis and identify &

confirm that the large amount transactions from different locations &

different time through ATM are made by the customer and the

transaction is consistent with the approved limit;

• Identify & verify the reason(s) of making large amount transactions

from different locations & different time through ATM by the

customer;


paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of issuing card


• Ensure that applicable CDD measures for issuing cards are conducted

as per paragraphs 8.3.1 to 8.3.10, 8.4.1, 8.4.3 & 8.4.4 of this Guidelines

at the time of issuing card or establishing relationship;








Guidelines;





3.01.11 Large amount of cash deposit

in CDM

Likely Major 3 (High) • Ensure that applicable CDD measures for CDM are conducted as per

paragraphs 8.3.1 to 8.3.10 & 8.4.6 of this Guidelines;

• Monitor the transactions through CDM on 24/7 basis through call

center;

• Identify & justify the large amount cash deposit through CDM;

│77




account or establishing relationship or issuing cards;

• If the CDM is used to deposit cash in the account, ensure that

applicable CDD measures are conducted on account holder,




• If the CDM is used for payments of cards, ensure that applicable CDD

measures for issuing cards are conducted as per paragraphs 8.3.1 to

8.3.10, 8.4.1, 8.4.3 & 8.4.4 of this Guidelines at the time of issuing card









Guidelines;





3.01.12 Huge fund transfer through

internet

Very Likely Major 4 (Extreme) • Ensure that applicable CDD measures for internet banking are

conducted as per paragraphs 8.3.1 to 8.3.10 & 8.4.8 of this

Guidelines;

• Monitor the transactions through internet on 24/7 basis through call

center;

• Identify & justify the huge transfer through internet ;

│78


• Ensure that customer acceptance policy is followed as indicated in

the paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of

opening accounts or establishing relationships or issuing cards which

are used to transfer the funds;

• If the fund transfers are made between the accounts, ensure that

applicable CDD measures are conducted on the account holders,



accounts or establishing relationships;

• If the fund transfers are made for payments of cards, ensure that

applicable CDD measures for issuing cards are conducted as per

paragraphs 8.3.1 to 8.3.10, 8.4.1, 8.4.3 & 8.4.4 of this Guidelines at the

time of issuing card or establishing relationship;

• Maintain enhanced due diligence (EDD) as per paragraphs 5.6 of this

Guidelines;

• Ensure that the names of customers, beneficiary owner(s), authorized





Guidelines;





3.01.13 Transaction Profile updated

through Internet Banking

Likely Major 3 (High) • Ensure that applicable CDD measures for internet banking are

conducted as per paragraphs 8.3.1 to 8.3.10 & 8.4.8 of this

Guidelines;

• Monitor the transactions through internet on 24/7 basis through call

center;

• Justify the transaction profile updated through internet with the

known source of income;

│79


• Ensure that customer acceptance policy is followed as indicated in

the paragraph 4.3.1 to 4.3.2.20 of this Guidelines at the time of

opening account or establishing relationship;

• Ensure that applicable CDD measures are conducted on the account

holder, beneficiary owner(s) and authorized person(s), if any, as per



• Maintain enhanced due diligence (EDD) as per paragraphs 5.6 of this

Guidelines;






Guidelines;





3.01.14 Customer to business

transaction-Online








• Conduct applicable CDD measures for online transactions as specified

in the paragraph 5.8.13(e) of this guidelines;




Guidelines;

│80


• Ensure that the name of the customer, owners/directors, beneficiary

owner(s) and authorized person(s), if any, are screened as specified in

the paragraphs 9.11.1 to 9.11.12 and done the needful for preventing




Guidelines;

• If any suspicion or inconsistency arises,, take required action




3.01.15 Payment Gateway -Internet

Banking

Likely Major 3 (High) • Maintain a register of this type customer

• Don't allow transaction until risk is reduced

• Do proper KYC and standard ID check

• Maintain enhanced due diligence (EDD)

• Monitor transactions

• Inform CCU if any unusual matters found

International Trade

3.01.16 Customer sending remittance

through SWIFT under single

customer credit transfer (fin-

103)













Guidelines at the time of opening account or establishing relationship

or in case of walk-in customer, if applicable;

│81


• Check the authenticity of SWIFT MT103 & ensure that cover fund is

credited to corresponding Nostro account or respective credit memo is

issued;






Guidelines;


CCU; and



3.01.17 Existing customer/ other bank

customer receiving

remittance through SWIFT

under single customer credit

transfer (fin-103) .








• If other bank customers’ remittance received through SWIFT, ensure

that required CDD measures are conducted on customer,


any, by the other banks as required by the guidelines, circulars &

directives of BFIU & Bangladesh Bank;







│82


• Check the authenticity of SWIFT MT103 & ensure that cover fund is

credited to corresponding Nostro account or respective credit memo is

issued;






Guidelines;


CCU; and



4. Risk Register for Country/jurisdiction

4.01.01 Import and export form/to

sanction country

Very Likely Major 4 (Extreme) • Reject transaction as per paragraph 9.12 (h) of this guidelines, if the

transaction has not commenced;

• Stop transaction as per paragraph 9.12 (h) of this guidelines, if the

transaction has already commenced;

• Report the transaction(s) to CCU for ultimate submission to BFIU

without any delay;



4.01.02 Transshipments, container,

flag vessel etc. under global

sanction

Very Likely Major 4 (Extreme) • Reject transaction as per paragraph 9.12 (h) of this guidelines, if the

transaction has not commenced;

• Stop transaction as per paragraph 9.12 (h) of this guidelines, if the

transaction has already commenced;

• Report the transaction(s) to CCU for ultimate submission to BFIU

without any delay;



│83


4.01.03 Establishing correspondent

relationship with sanction

bank and/or country

Very Likely Major 4 (Extreme) • Corresponding relationship with sanction bank and/or country are not

allowed as per paragraph 5.8.15 (j) of this guidelines;

• Stop/discontinue corresponding relationship with sanction bank

and/or country, if the relationship has already established following

paragraph 5.8.15 (j) of this guidelines;

• Report the name of the sanctioned bank and/or country to CCU for

ultimate submission to BFIU without any delay;



4.01.04 Establishing correspondent

relationship with poor AML &

CFT practice country

Very Likely Major 4 (Extreme) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1


• Conduct applicable CDD measures of corresponding banking as per


• Screen the names of institution, country in which it is located and/or

its’ owner(s)/director(s), beneficiary owner(s), senior management, for

the sanctions as specified in the paragraphs 9.11.1 to 9.11.12 and do

the needful for preventing TF & PF as specified in the paragraph 9.12 of

this Guidelines;

• Maintain enhanced due diligence (EDD) in line with the paragraph 5.6

of this Guidelines


• Monitor the transactions of the account, if any, as per chapter 10 of

this Guidelines;




4.01.05 Customer belongs to higher-

risk geographic locations such

as High Intensity Financial

Crime Areas



• Conduct applicable CDD measures as per paragraphs 5.8.1.1 to 5.8.22

of this Guidelines;

│84


• Screen the names of the customers, country in which it is located

and/or its’ owner(s)/director(s), beneficiary owner(s), senior

management, etc., for the sanctions as specified in the paragraphs





of this guidelines;












of this Guidelines



this Guidelines;




│85


4.01.06 Customer belongs to

countries or geographic areas

identified by credible sources

as providing funding or

support for terrorist activities,

or that have designated

terrorist organizations

operating within their

country.




of this Guidelines;








of this guidelines;












of this Guidelines



this Guidelines;




│86


4.01.07 Customer belongs to High

Risk ranking countries of the

Basel AML index.




of this Guidelines;








of this guidelines;












of this Guidelines



this Guidelines;




│87


4.01.08 Customer belongs to the

countries identified by the

bank as higher-risk because

of its prior experiences or

other factors.




of this Guidelines;








of this guidelines;












of this Guidelines



this Guidelines;




│88


4.01.09 Any country identified by

FATF or FSRBs- (FATF style

Regional Body) as not having

adequate AML & CFT systems




of this Guidelines;








of this guidelines;












of this Guidelines



this Guidelines;

• If any suspicion arises, take required action and initiate STR to BFIU

through CCU; and



│89


4.01.10 Any bank that provide service

to ‘Shell Bank’

Very Likely Major 4 (Extreme) • Banking relationship and/or transaction with shell bank and/or any

bank that provides services to shell bank are not allowed as per

paragraph 4.3.1(p) of this guidelines;

• Stop/discontinue corresponding relationship and/or transaction with

any shell bank and/or any bank that provides services to shell bank, if

the relationship has already established and/or transaction has been

started following paragraphs 5.8.15 (h)(i) of this guidelines;


through CCU; and



4.01.11 Any bank that allow payable

through account

Likely Moderate 3 (High) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1


• Conduct applicable CDD measures as per paragraphs 5.8.15 of this

Guidelines;






• Give emphasis to the CDD measures as per paragraph 5.8.15(l) of this

guidelines;


through CCU; and



4.01.12 Any country identified as

destination of illicit financial

flow




of this Guidelines;

│90









of this guidelines;












of this Guidelines



this Guidelines;


through CCU; and



4.01.13 Branches in a Border Area Likely Major 3 (High ) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1



of this Guidelines;

│91









of this guidelines;












of this Guidelines



this Guidelines;


through CCU; and



│92


4.01.14 Area identified as high risk in

the NRA

Likely Major 3 (High ) • Follow customer acceptance policy as indicated in the paragraphs 4.3.1



of this Guidelines;








of this guidelines;












of this Guidelines



this Guidelines;


through CCU; and



│93


4.01.15 Countries subject to UN

embargo/sanctions

Very Likely Major 4 (Extreme) • Banking relationship and/or transaction with Countries subject to UN

embargo/sanctions are not allowed as per paragraph 4.3.1(q) of this

guidelines;

• Stop/discontinue corresponding relationship and/or transaction with

Countries subject to UN embargo/sanctions, if the relationship has

already established and/or transaction has been started;


through CCU; and



5. Register for Regulatory Risk

5.01.01 Not having AML/CFT

guideline

Likely Major 3 (High) give

show cause

notice by BFIU

• Immediately prepare detailed AML/CFT guideline.

5.01.02 Not forming a Central

Compliance Unit (CCU)


show cause

notice by BFIU

• Immediately form a Central Compliance Unit (CCU).

5.01.03 Not having an AML & CFT

Compliance Officer


show cause

notice by BFIU

• Immediately appoint a competent AML/CFT compliance officer.

5.01.04 Not having Branch Anti

Money Laundering

Compliance Officer


show cause

notice by BFIU

• Immediately appoint Branch Anti Money Laundering.

5.01.05 Compliance Officer Likely Major 3 (High) give

show cause

notice by BFIU

• Immediately appoint a competent AML/CFT compliance officer.

5.01.05 Not having an AML & CFT

program

Likely Moderate 2 (Medium) • Do proper AML/CFT compliance program.

5.01.06 No senior management

commitment to comply with

MLP and ATA Act


show cause

notice by BFIU

• Immediately develop & approve the senior management itment to

comply with MLP and ATA Act

│94


5.01.07 Failure to follow the

AMLD/BFIU circular, circular

letter, instructions etc.


show cause

notice by BFIU

• Comply with the AMLD/BFIU circular, circular letter, instructions etc.

5.01.08 Unique account opening form

not followed while opening

account


show cause

notice by BFIU

• Follow the Unique account opening form.

5.01.09 Non screening of new and

existing customers against

UNSCR Sanction and OFAC

lists

Likely Major 3 (High ) • Monitor Transactions;

• Apply enhanced due diligence (EDD)

• Do proper KYC and standard ID and additional ID check

• Monitor High risk accounts

• Review & update KYC of accounts in shorter interval than other areas.

• Do screening properly.

• If there is any fund diversion or suspicious matter found then report

SAR/STR.

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Annexure- B

KYC Documentation Customer

type Standard Identification

document Document for verification of

source of funds Document or strategy for verification of address

Individuals � Passport � National Id Card � Birth Registration Certificate

(Printed copy, with seal & signature from the Registrar)

� Valid driving license (if any) � Credit Card (if any) � Any other documents that

satisfy to the bank. NB: But in case of submitting the birth registration certificate, any other photo id (issued by a Government department or agency) of the person has to be supplied with it. If he does not have a photo id, then a certificate of identity by any renowned people has to be submitted according to the bank’s requirement. That certificate must include a photo which is duly attested by the signing renowned person. The person should sign the certificate (printing his/her name clearly underneath) and clearly indicate his/her position or capacity on it together with a contact address and phone number.

� Salary Certificate (for salaried person).

� Employed ID (For ascertaining level of employment).

� Self declaration acceptable to the bank. (commensurate with declared occupation)

� Documents in support of beneficial owner’s income (income of house wife, students etc.)

� Trade License if the customer declared to be a business person

� TIN (if any) � Documents of property sale.

(if any) � Other Bank statement (if any) � Document of FDR

encashment (if any) � Document of foreign

remittance (if any fund comes from outside the country)

� Document of retirement benefit.

� Bank loan.

� Acknowledgement receipt of thanks letter through postal department.

� Proof of delivery of thanks letter through courier.

� Third party verification report. � Physical verification report of

bank official � Copy of utility bill/utility card

on satisfaction of the dealing officer (not beyond 3 months old). The bill should be in the name of the applicant or his/her parent’s name.

� Residential address appearing on an official document prepared by a Government Agency

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Customer

type Standard Identification

document Document for verification of

source of funds Document or strategy for verification of address

Joint Accounts

� Passport � National Id Card � Birth Registration Certificate

(Printed copy, with seal & signature from the Registrar)

� Valid driving license (if any) � Credit Card (if any) � Any other documents (photo)

that satisfy to the bank.

� Salary Certificate (for salaried person).

� Employed ID (For ascertaining level of employment).

� Self declaration acceptable to the bank. (commensurate with declared occupation)

� Documents in support of beneficial owner’s income (income of house wife, students etc.)

� Trade License if the customer declared to be a business person

� TIN (if any) � Documents of property sale.

(if any) � Other Bank statement (if any) � Document of FDR

encashment (if any) � Document of foreign

remittance (if any fund comes from outside the country)

� Document of retirement benefit.

� Bank loan.







Sole Proprietorships or Individuals doing business

� Passport � National Id Card Birth Registration Certificate (Printed copy, with seal & signature from the Registrar) � Valid driving license (if any) � Credit Card (if any) � Rent receipt of the shop (if

the shop is rental) � Ownership documents of the

shop (i.e. purchase documents of the shop or inheritance documents).

� Membership certificate of any association. (Chamber of commerce, market association, trade association i.e.; Hardware association, cloth Merchant association, hawker’s association etc.)

� Any other documents that satisfy to the bank.

� Trade License � TIN � Self declaration acceptable

to the bank. (commensurate with nature and volume of business)

� Documents of property sale. (if injected any fund by selling personal property)

� Other Bank statement (if any) � Document of FDR

encashment (if any fund injected by en-cashing personal FDR)

� Document of foreign remittance (if any fund comes from outside the country)

� Bank loan (if any) � Personal borrowing (if any)




bank official. � Copy of utility bill/utility card


� Residential address appearing on an official document prepared by a Government agency.

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Partnership � Partnership deed/

partnership letter � Registered partnership deed

(if registered) � Resolution of the partners,

specifying operational guidelines/ instruction of the partnership account.

� Passport of partners � National Id Card of partners � Birth Registration Certificate

of partners (Printed copy, with seal & signature from the Registrar)

� Valid driving license of partners (if any)

� Credit Card of partners (if any)

� Rent receipt of the shop (if the shop is rental)

� Ownership documents of the shop ( i.e. purchase documents of the shop or inheritance documents)

� Membership certificate of any association. (Chamber of commerce, market association, trade association i.e.; Hardware association, cloth Merchant association, hawker’s association etc.)

� Any other documents that satisfy to the bank.

� Trade License � TIN � Documents of property sale.

(if injected any fund by selling personal property of a partner)

� Other Bank statement (if any) � Document of FDR

encashment (if any partner injected capital by enchasing Personal FDR)

� Document of foreign remittance (if any fund comes from outside the country)

� Bank loan � Personal Borrowing (if any)

� Acknowledgement receipt of thanks letter through postal department






Private Limited Companies

� Passport of all the directors � National Id Card of all the

directors � Certificate of incorporation � Memorandum and Articles of

Association � List of directors � Resolution of the board of

directors to open an account and identification of those who have authority to operate the account

� Power of attorney granted to its Managers, Officials or Employees to transact business on its behalf

� Nature of the company’s business

� Expected monthly turnover � Identity of beneficial owners,

holding 20% interest or more of having control over the company’s assets and any

� A copy of last available financial statements duly authenticated by competent authority

� Other Bank statement � Trade License � TIN � VAT registration � Bank loan

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person (or persons) on whose instructions the signatories of the account act where such persons may not be a full time employee, officer or director of the company.

Public Limited Companies



Association � Certificate of commencement

of business � List of directors in form–XII � Resolution of the board of

directors to open an account and identification of those who have authority to operate the account.

� Power of attorney granted to its Managers, Officials or Employees to transact business on its behalf.



holding 20% interest or more of having control over the company’s assets and any person (or persons) on whose instructions the signatories of the account act where such persons may not be a full time employee , officer or director of the company.

� A copy of last available financial statements duly certified by a professional accountant.

� Other Bank statement (if any) � Trade License � TIN � Cash flow statement � VAT registration � Bank loan � Any other genuine source

Government- Owned entities

� Statue of formation of the entity

� Resolution of the board to open an account and identification of those who have authority to operate the account.

� Passport of the operator (s) � National Id Card of the

operator (s)

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NGO � National Id Card of the

operator (s) � Passport of the operator (s) � Resolution of the board of


� Documents of nature of the NGO

� Certificate of registration issued by competent authority

� Bye-laws ( certified) � List of Management

Committee/ Directors


� Other Bank statement � TIN � Certificate of Grand/Aid

Charities or Religious Organizations

� National Id Card of the operator (s)

� Passport of the operator (s) � Resolution of the Executive

Committee to open an account and identification of those who have authority to operate the account.

� Documents of nature of the Organizations

� Certificate of registration issued by competent authority (if any)


Committee/Directors


� Other Bank statement � Certificate of Grant/Aid/

donation � Any other legal source

Clubs or Societies

� National Id Card of the operator (s)

� Passport of the operator (s) � Resolution of the Executive

Committee to open an account and identification of those who have authority to operate the account.

� Documents of nature of the Organizations.

� Certificate of registration issued by competent authority (if any)


Committee/ Directors

� A copy of last available financial statements duly certified by a professional (if registered).

� Other Bank statement � Certificate of Grant/ Aid � Subscription � If unregistered declaration of

authorized person/ body.

Trusts, Foundations or similar entities

� National Id Card of the trustee (s)

� Passport of the trustee (s) � Resolution of the Managing

body of the Foundation/Association to open an account and identification of those who

� A copy of last available financial statements duly certified by a professional (if registered)

� Other Bank statement � Donation

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have authority to operate the account

� Certified true copy of the Trust Deed

� Bye-laws ( certified) � Power of attorney allowing

transaction in the account. Financial Institutions (NBFI)



Association � Certificate of commencement

of business � List of directors in form-XII � Resolution of the board of


� Power of attorney granted to its Managers, Officials or Employees to transact business on its behalf.



holding 20% interest or more of having control over the company’s assets and any person (or persons) on whose instructions the signatories of the account act where such persons may not be a full time employee, officer or director of the company.


� Other Bank statement � Trade License � TIN � VAT registration � Cash flow statement

Embassies � Valid Passport with visa of the authorized official

� Clearance of the foreign ministry

� Other relevant documents in support of opening account

N/A

Important - This is an example of documents that may be taken by a bank in case of establishing

business relationship with its clients. But it is a mere example only, the bank should urge correct and accurate information that could satisfy the bank itself.

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Annexure-C

Internal Suspicious Activity Report Form (ISAR)

Strictly Private & Confidential

To Branch Anti Money Laundering Compliance Officer Date:

From Name (Mr./Ms.) Branch/Department

Job Title SAR Ref. No.

Note: This form may be completed in English. For any queries, please contact BAMLCO. Please provide full details of the transaction(s) and any other relevant data. Attach copies of relevant documents/transaction notes.

Customer/Business Name

Transaction Date(s)

Account Number(s)

Copies of transaction and Account details attached

Description of transaction(s). (Nature of transaction, Origin & destination of Transaction etc.) Source of funds and purpose of transaction (If you can, try to tactfully ask the customer) Reasons why you think the transaction is suspicious (Give as much details as possible) Signature of bank staff.

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TO BE COMPLETED BY BAMLCO ACTION TAKEN TO VALIDATE h Acknowledgement sent to the originator on __________________ h Reviewed account documentation h Discuss with the relationship manager/branch manager h Other AGREED SUSPICIOUS Yes/No COMMENTS/NOTES OF BAMLCO Signature Signature BAMLCO Date: Relationship Manager Date:

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Annexure-D

KYC for Walk-in Customer/other than A/C holder

The BFIU Circular No. 10 directed to obtain KYC of applicants supported by evidence who wants to conduct

one-off transactions without maintaining account. The KYC format which to be filed in is as follows:-

Name:

Occupation:

Father’s name:

Date of birth:

Mother’s name:

Nationality:

Address: Phone/Mobile: Other Identification: (ID Card number, Passport details etc.) Value of Transaction:

Source of Fund:

Beneficiary Name & Contact Details: Purpose of Transaction: Date:

Full Name: Signature:

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Annexure-E

ANTI-MONEY LAUNDERING & COMBATING FINANCING OF TERRORISM QUESTIONNAIRE FOR CORRESPONDENT RELATIONSHIP

A. BASIC INFORMATION: 1. Name of the Institution: ............................................................................................................ 2. Registered Address: ................................................................................................................. 3. Website Address: ..................................................................................................................... 4. Principal Business Activities: .................................................................................................... 5. Regulatory Authority: ................................................................................................................ 6. Operational Status: ................................................................................................................... • Does your Bank maintain a physical presence in the licensing country? �� Yes / �� No B. OWNERSHIP / MANAGEMENT 7. Is your institution listed on any stock exchange?

If so, which stock exchange? ......................................................................................................................

�� Yes / �� No

8. If “No” to Q7, please provide a list of the major shareholders holding more than 10% shares in your institution. ...................................................................................................................... ......................................................................................................................

C. ANTI-MONEY LAUNDERING AND TERRORIST FINANCING CONTROLS

If you answer “no” to any question, additional information can be supplied at the end of the questionnaire.

I. General AML & CFT Policies, Practices and Procedures: 9. Does your institution have in place policies and procedures approved by your

institution’s board or senior management to prevent Money Laundering and Combat Financing of Terrorism?

�� Yes / �� No

10. Does your institution have a legal and regulatory compliance program that includes a designated officer that is responsible for coordinating and overseeing the AML/CFT framework?

�� Yes / �� No

11. Has your institution developed written policies documenting the processes that they have in place to prevent, detect and report suspicious transactions?

�� Yes / �� No

12. Does your institution have a policy prohibiting accounts/relationships with shell banks? (A shell bank is defined as a bank incorporated in a jurisdiction in which it has no physical presence and which is unaffiliated with a regulated financial group.)

�� Yes / �� No

13. Does your institution permit the opening of anonymous or numbered accounts by customers?

�� Yes / �� No

14. Does your institution have policies to reasonably ensure that they will not conduct transactions with or on behalf of shell banks through any of its accounts or products?

�� Yes / �� No

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15. Does your institution have policies covering relationships with Politically Exposed Persons (PEP’s), their family and close associates?

�� Yes / �� No

16. Does your institution have policies and procedures that require keeping all the records related to customer identification and their transactions? If “Yes”, for how long? .........................................................................................

�� Yes / �� No

II. Risk Assessment

17. Does your institution have a risk-based assessment of its customer base and their transactions?

�� Yes / �� No

18. Does your institution determine the appropriate level of enhanced due diligence necessary for those categories of customers and transactions that the FI has reason to believe pose a heightened risk of illicit activities at or through the FI?

�� Yes / �� No

III. Know Your Customer, Due Diligence and Enhanced Due Diligence

19. Has your institution implemented processes for the identification of those customers on whose behalf it maintains or operates accounts or conducts transactions?

�� Yes / �� No

20. Does your institution have a requirement to collect information regarding its customers’ business activities?

�� Yes / �� No

21. Does your institution have a process to review and, where appropriate, update customer information relating to high risk client information?

�� Yes / �� No

22. Does your institution have procedures to establish a record for each new customer noting their respective identification documents and ‘Know Your Customer’ information?

�� Yes / �� No

23. Does your institution complete a risk-based assessment to understand the normal and expected transactions of its customers?

�� Yes / �� No

IV. Reportable Transactions for Prevention and Detection of ML/TF

24. Does your institution have policies or practices for the identification and reporting of transactions that are required to be reported to the authorities?

�� Yes / �� No

25. Where cash transaction reporting is mandatory, does your institution have procedures to identify transactions structured to avoid such obligations?

�� Yes / �� No

26. Does your institution screen customers and transactions against lists of persons, entities or countries issued by government/competent authorities or under the UN Security Council Resolution?

�� Yes / �� No

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27. Does your institution have policies to reasonably ensure that it only operates

with correspondent banks that possess licenses to operate in their countries of origin?

�� Yes / �� No

V. Transaction Monitoring

28. Does your institution have a monitoring program for unusual and potentially suspicious activity that covers funds transfers and monetary instruments such as traveler’s checks, money orders, etc?

�� Yes / �� No

VI. AML Training

29. Does your institution provide AML & CFT training to relevant employees of your organization?

�� Yes / �� No

30. Does your institution communicate new AML related laws or changes to existing AML related policies or practices to relevant employees?

�� Yes / �� No

31. Does your institution provide AML training to relevant third parties if they are employed to carry out some of the functions of your organization?

�� Yes / �� No

Space for additional information: (Please indicate which question the information is referring to.) ............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................ ............................................................................................................................................................................ D. GENERAL

32. Does the responses provided in this Declaration applies to the following entities:

• Head Office and all domestic branches • Overseas branches • Domestic subsidiaries • Overseas subsidiaries

�� Yes / �� No

If the response to any of the above is “No”, please provide a list of the branches and / or subsidiaries that are excluded, including the name of the institution, location and contact details.

I, the undersigned, confirm to the best of my knowledge that the information provided in this questionnaire is current, accurate and representative of the anti-money laundering and anti-terrorist financing policies and procedures that are established in my institution.

I also confirm that I am authorized to complete this questionnaire on behalf of my institution. Signature:

Name: Designation: Date: Contact No: Email:

.........................................................................................

.........................................................................................

.........................................................................................

.........................................................................................

.........................................................................................

.........................................................................................

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Annexure-F

SUSPICIOUS TRANSACTION REPORT (STR) FORM

A. Reporting Institution:

1. Name of the Bank:

2. Name of the Branch:

B. Details of Report:

1. Date of sending report:

2. Is this the addition of an earlier report? Yes � No �

3. If yes, mention the date of previous report

C. Suspect Account Details:

1. Account Number:

2. Name of the Account:

3. Nature of the Account: (Current/Savings/FDR/Loan/other, pls. specify)

4. Nature of Ownership: (Individual/Proprietorship/Partnership/Company/other, pls. specify)

5. Date of Opening/Transaction:

6. Address:

D. Account holders details:

1 1. Name of the account holder :

2. Address:

3. Profession:

4. Nationality:

5. Other account(s) number (if any):

6. Other business:

7. Father’s Name:

8. Mother’s Name:

9. Date of birth:

10. Place of Birth:

11. Passport No.

12. National Identification No.

13. Birth Registration No.

14. TIN:

2 1. Name of the account holder :

2. Relation with the account holder mentioned in sl. no. D1

3. Address:

4. Profession:

5. Nationality:

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6. Other account(s) number (if any):

7. Other business:

8. Father’s Name:

9. Mother’s Name:

10. Date of birth:

11. Place of Birth:

12. Passport No.



15. TIN:

E. Introducer Details:

1. Name of Introducer:

2. Account Number:

3. Relation with account holder:

4. Address:

5. Date of opening:

6. Whether introducer is maintaining good relation with bank

F. Reasons for considering the transaction(s) as unusual/suspicious:

a. � Identity of clients

b. � Activity of account

c. � Background of client

d. � Multiple accounts

e. � Nature of transaction

f. � Value of transaction

g. � Other reason (Pls. Specify)

..................................................................

..................................................................

(Mention summery of suspicion and consequence of events)

[To be filled by the BAMLCO]

G. Suspicious Activity Information: Summary characterization of suspicious activity:

a. � Corruption and bribery k. � Murder, grievous physical injury u. � Terrorism or financing in terrorist activities

b. � Counterfeiting currency l. � Trafficking of women and children v. � Adulteration or the manufacture of goods through infringement of title

c. � Counterfeiting deeds and documents

m. � Black marketing w. � Offences relating to the environment

d. � Extortion n. � Smuggling of domestic and foreign currency

x. � Sexual exploitation

e. � Fraud o. � Theft or robbery or dacoity or piracy or hijacking of aircraft

y. � Insider trading and marketing manipulation

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f. � Forgery p. � Human Trafficking z. � Organized crime and participation in organized criminal groups

g. � Illegal trade of firearms

q. � Dowry aa. � Racketeering

h. � Illegal trade in narcotic drugs, psychotropic substances and substances causing intoxication

r. � Smuggling and offences related to customs and excise duties

bb. � Other ..........................................

i. � Illegal trade in stolen and other goods

s. � Tax related offences

j. � Kidnapping, illegal restrain and hostage taking

t. � Infringement of intellectual property rights

H. Transaction/Attempted Transaction Details: Sl. no. Date Amount Type*

* Cash/Transfer/Clearing/TT/etc. Add paper if necessary

I. Counter Part’s Details (Where Applicable) Sl. no. Date Bank Branch Account no. Amount

J. Has the suspicious transaction/activity had a material impact on or otherwise affected the financial soundness of the bank?

Yes � No �

K. Has the bank taken any action in this context? If yes, give details.

L. Documents to be enclosed:

1. Account opening form along with submitted documents 2. KYC Profile, Transaction Profile 3. Account statement for last one year 4. Supporting Voucher/correspondence mentioned in sl. no. H 5. Others

Signature : (CAMLCO or authorized officer of CCU) Name : Designation : Phone : Date :

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Annexure-G

SUSPICIOUS TRANSACTION REPORT (STR) FORM

(WIRE TRANSFER/MOBILE FINANCIAL SERVICE)

A. Reporting Institution:

1. Name of the Institution:

2. Name of the Branch/Agent:

3. Service Place of the Branch/Agent:

4. Agent Identification / ID:(If applicable)

B. Details of Report:

1. Date of sending report:

2. Is this the addition of an earlier report? Yes No

3. If yes, mention the date of previous report

C. Suspect Details:

1. Name:

2. Address:

3. Profession/Business:

4. Nationality/Ownership status:

5. Father’s name/ Proprietor’s name:

6. Mother’s Name (where necessary):

7. Date of birth (where necessary):

8. Place of birth:

9. Passport No.



12. Contact Details:

Mobile No-

Email-

13. Any other important Information:

D. Suspicious Transaction/Attempted Transaction Details:

Sl. no. Date Amount Type

E. Reasons for considering the transaction(s) as unusual/suspicious?

(Mention summary of suspicion and consequence of events) (Use separate sheet, if needed)

F. List of Documents attached with the report

Signature: (CAMLCO or authorized officer of CCU) Name: Designation: Phone: Date: