Jun.23, 2010

Stock dealers and brokers and NGOs may need to provide the central bank with information about any suspicious transactions, according to a draft amendment to the anti-money laundering act.

Insider trading and market manipulation, and adulteration of commodities may also be included in the list of money laundering-related crimes.

Bangladesh Bank (BB) has already sent the draft proposal of the amendment to the finance ministry.

The anti-money laundering act makes necessary for institutions to send report to the central bank about any suspicious transaction. Under the existing act, such institutions include banks, financial institutions, insurance companies and moneychangers.

The amendment has proposed inclusion of the stock dealers, stockbrokers, portfolio managers, merchant banks and nongovernmental organisations (NGOs).

Such amendments need prior consultation with all the regulatory authorities concerned, said former adviser to a caretaker government AB Mirza Azizul Islam. He said share market is in a volatile situation now and bringing such amendments at this time will not be right.

The former adviser also said if any such amendments are brought, the institutions will have to report to the central bank, whereas the Securities and Exchange Commission is the regulatory body for the stockmarket. The government should think whether the amendments would lead to a duality, he said.

Sixteen types of crimes are now considered money laundering activities. The proposed amendment recommends inclusion of terrorism and terror financing, adulteration or production of commodity violating conditions, environment-related crimes, and sexual repression.

Under the existing law, the Anti-Corruption Commission investigates money-laundering cases, while the amendment recommends shifting the responsibility to the police.

BB officials said the government has applied for membership of Egmont Group, a coordinating company of over 100 financial intelligence units across the world.

To become a member of Egmont Group, the amendments to the anti-money laundering act have to be incorporated to fulfil the requirements of the Financial Action Task Force report. A team of the international anti-corruption body gave a mutual evaluation report to the government last year.

A BB official said the amendments were proposed in the light of the report.