CASH TRANSACTIONS REPORT (CTR) AND SUSPECIOUS TRANSACTION REPORT (STR)

Manjur Alam Khan

Vice President
Chapter I Back Ground

1.2 What is money Laundering

On the basis of “Money Laundering Act 2002, Money Laundering” means

 Properties acquired or earned directly or indirectly through illegal means &

 Illegal transfer, conversion, concealment of location or assistance in the above act of properties
acquired or earned directly or indirectly through legal or illegal means.

1.7 How Financial Institutions can combat money laundering

 One of the best methods of preventing and deterring money laundering is a sound knowledge of a
customer’s business and pattern of financial transactions and commitments. The adoption
procedure “Know your customer” is not only a principle of good business but it is an essential tool
to avoid involvement in money laundering.

 Institutions and intermediaries must keep transaction records that are comprehensive enough to
establish audit trail. Such records can also provide useful information on the people and
organizations involving the laundering schemes.

2.2 The offence of Money Laundering

 It is an offence for banks, Financial Institution and other institutions engaged in financial activities
not to retain identification and transaction record of their customers.

 It is an offence for banks, Financial Institutions and other institutions engaged in financial
activities not to report the knowledge or suspicious of money laundering to Bangladesh Bank as
soon as it is reasonably practicable after the information came to light.

2.3 Penalties for Money Laundering

 The offence of obstructing investigations or failure to assist any enquiry officer in connection with
an investigation into money laundering is punishable by minimum imprisonment for one year or a
fine of at least Tk.10,000/-,or both.

 If, any bank, financial institution and the institutions engaged in financial activities fail to retain
customer identification and transaction records or fail to furnish required information as per the
Act. Bangladesh bank will report such failure to the licensing authority of the defaulting
instruction so that the concern authority can take proper action for such negligence and failure.

 Bangladesh bank is empowered to impose fines of not less than Tk.10,000/- and not more than
Tk.100,000/- on any Bank, financial institutions and other institutions engaged in financial
activities for the4 failure or negligence to retain customers identification and transaction records
or fail to furnish required information to Bangladesh bank.

Chapter IV Organizational Structure

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4.2.2 Individual responsibilities

Chapter V Identification procedure

Chapter VI Anti-money Laundering Processes

6.1 Know your customer procedures

6.2 Risk categorization
6.3 Transaction monitoring process / Transaction profiles

6.4 Suspicious Activity Report process

 Financial Institution must established internal procedures so that, in the event of a suspicious activity
being discovered, all staff is aware of the reporting chain and the procedures to follow.

 Where staff continue to encounter suspicious activities on an account , which they have previously
reported to AMLCO/BMLCO , they should continue to make report whenever a further suspicious
transaction occurs.

 All report of suspicious activity must reach the CAMLCO and only he CAMLCO should have the authority to
determine whether a disclosure in accordance with the regulation is appropriate.

Chapter VIII Recognition of Suspicious Transactions

8.1 Recognition of suspicious Transactions

As a type of transactions that may be used by money launderer are almost unlimited, it is difficult to
define a suspicious transaction.
Suspicion is personal and subjective and falls far short of proof based on firm evidence. It is more than the
absence of certainty that some one is innocent.
A person would not be expected to know the exact nature of the criminal offence or that the particular
funds were definitely those arising from the crime.
However a suspicious transaction will often be one that is in consistent with a customer’s known,
legitimate business or personal activities or with the normal business for that type of customer.
Therefore , the first key to recognition is knowing enough about customer’s business to recognize that a
transaction or series of transactions, is unusual.

8.2 Reporting of suspicious Transactions

There is a statutory obligation on all staff to report suspicions of money laundering. Reporting should be
made in accordance with the internal reporting procedure to be established by the financial institution for
the purposes of facilitating the operation of the reporting obligation.
Each institution has a clear obligation to ensure:
 That each relevant employee knows to which person he or she should report suspicions.
 That there is a clear reporting chain under which those suspicions will be passed without delay to the
CAMLCO.
Once employee have reported their suspicions to the appropriate person in accordance with an
established internal reporting procedure they have fully satisfied the statutory obligation.

8.3 Internal reporting procedures and Records of suspicions.

Reporting lines should be as short as possible, with the minimum number of people between the person
with the suspicion and the CAMLCO. This ensures speed, confidentially and accessibility to the CAMLCO.
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 However in the line of accepted practice , some financial sector business may choose to require that such
unusual or suspicious transaction be drawn initially to the attention of supervisory management to ensure
that there are no known facts that will negate the suspicion before further reporting to the CAMLCO.

Record of suspicions, which were raised internally with the CAMLCO but not disclosed to Bangladesh Bank
, should be retained for five years from the date of transaction.
Record of suspicions which Bangladesh Bank has no interest should be retained for a similar period.
Record of suspicions that assist with investigations should be retained until the financial institutions
informed by the Bangladesh bank that they are no longer needed.

8.4 Reporting Procedure

The use of standard format in the reporting of specious activities is important and all institutions are
required to use the unusual/ suspicious transactions reporting forms.
Sufficient information should be disclosed on the suspicious transaction, including the reason for
suspicion, to enable the investigating officer to conduct appropriate enquiries. If a particular offence is
suspected, this should be stated so that the report may be passed to the appropriate investigation team
with minimum of delay.
However, it is not necessary to complete all sections of the specious report form and its submission should
not be delayed if particular details are not available.

9.1 Statutory Requirements

It is imperative for all financial institutions to take appropriate measures to make employees aware of:

 Policies and procedures to prevent Money laundering and for identification, records keeping and internal
reporting
 The legal requirements
 To provide relevant employees with training in the recognition and handling of suspicious transactions.

Annexure –G Examples of potential suspicious Transaction

3
 CASH TRANSACTIONS REPORT (CTR) AND
SUSPECIOUS TRANSACTION REPORT (STR)

Recognition of suspicious Transactions

As types of transactions that may be used by money launderer are almost unlimited, it is difficult to define
a suspicious transaction.

Suspicion is personal and subjective and falls far short of proof based on firm evidence. It is more than the
absence of certainty that some one is innocent.

A person would not be expected to know the exact nature of the criminal offence or that the particular
funds were definitely those arising from the crime.

However a suspicious transaction will often be one that is in consistent with a customer’s known,
legitimate business or personal activities or with the normal business for that type of customer.

Therefore , the first key to recognition is knowing enough about customer’s business to recognize that a
transaction or series of transactions, is unusual.

Suspicious Activity Report process

Financial Institution must established internal procedures so that, in the event of a suspicious activity
being discovered, all staff is aware of the reporting chain and the procedures to follow.

Where staff continue to encounter suspicious activities on an account , which they have previously
reported to AMLCO/BMLCO , they should continue to make report whenever a further suspicious
transaction occurs.

All report of suspicious activity must reach the CAMLCO and only he CAMLCO should have the authority to
determine whether a disclosure in accordance with the regulation is appropriate.

Reporting of suspicious Transactions

There is a statutory obligation on all staff to report suspicions of money laundering. Reporting should be
made in accordance with the internal reporting procedure to be established by the financial institution for
the purposes of facilitating the operation of the reporting obligation.
Each institution has a clear obligation to ensure:
 That each relevant employee knows to which person he or she should report suspicions.
 That there is a clear reporting chain under which those suspicions will be passed without delay to the
CAMLCO.
Once employee have reported their suspicions to the appropriate person in accordance with an
established internal reporting procedure they have fully satisfied the statutory obligation.
4
Internal reporting procedures and Records of suspicions.

Reporting lines should be as short as possible, with the minimum number of people between the person
with the suspicion and the CAMLCO. This ensures speed, confidentially and accessibility to the CAMLCO.

However in the line of accepted practice , some financial sector business may choose to require that such
unusual or suspicious transaction be drawn initially to the attention of supervisory management to ensure
that there are no known facts that will negate the suspicion before further reporting to the CAMLCO.

Record of suspicions, which were raised internally with the CAMLCO but not disclosed to Bangladesh Bank
, should be retained for five years from the date of transaction.
Record of suspicions which Bangladesh Bank has no interest should be retained for a similar period.
Record of suspicions that assist with investigations should be retained until the financial institutions
informed by the Bangladesh bank that they are no longer needed.

Reporting Procedure

The use of standard format in the reporting of specious activities is important and all institutions are
required to use the unusual/ suspicious transactions reporting forms.
Sufficient information should be disclosed on the suspicious transaction, including the reason for
suspicion, to enable the investigating officer to conduct appropriate enquiries. If a particular offence is
suspected, this should be stated so that the report may be passed to the appropriate investigation team
with minimum of delay.
However, it is not necessary to complete all sections of the specious report form and its submission should
not be delayed if particular details are not available.

Statutory Requirements

It is imperative for all financial institutions to take appropriate measures to make employees aware of:

 Policies and procedures to prevent Money laundering and for identification, records keeping and
internal reporting
 The legal requirements
 To provide relevant employees with training in the recognition and handling of suspicious
transactions.

Examples of potential suspicious Transaction

Manjur Alam Khan -Vice President