Bangladesh -- Travel Rule Implementation Regulatory Overview

The implementation of the FATF Travel Rule in Bangladesh is unique due to the country's current stance on virtual assets (cryptocurrencies).

Current Status: Not Adopted (due to ban on virtual assets)

Bangladesh has officially prohibited the use, trade, and holding of virtual assets (cryptocurrencies) within its jurisdiction. Therefore, there are no legally operating Virtual Asset Service Providers (VASPs) to whom the FATF Travel Rule could apply.

Here's a breakdown based on this fundamental position:

1. Whether Adopted:

   • No, the FATF Travel Rule has not been adopted in Bangladesh. This is because the underlying activity of dealing in virtual assets itself is considered illegal and unauthorized by the central bank and the government.

2. Effective Date:

   • N/A. Since the Travel Rule has not been adopted, there is no effective date.

3. Threshold Amounts:

   • N/A. There are no legally operating VASPs, and thus no thresholds for Travel Rule implementation.

4. Which VASPs are Covered:

   • N/A. There are no legally recognized VASPs in Bangladesh. The Bangladesh Financial Intelligence Unit (BFIU) and Bangladesh Bank have consistently warned against engaging with cryptocurrencies, stating that they are not legal tender and are not authorized by any regulatory body.

5. Technical Implementation Requirements:

   • N/A. As there are no legal VASPs and no adoption of the rule, there are no prescribed technical implementation requirements.

6. Penalties for Non-Compliance:

   • Penalties exist for engaging in virtual asset activities themselves, not for non-compliance with the Travel Rule.
   • Because virtual assets are illegal, individuals or entities found engaging in cryptocurrency trading, mining, or any related activities could face legal consequences under existing laws, such as foreign exchange regulations, money laundering prevention acts, and potentially cybercrime laws. While specific penalties directly referencing crypto might not be explicit in older laws, authorities have cited various acts to justify enforcement actions against crypto-related activities. The BFIU has warned that dealing in virtual currencies may fall under the Money Laundering Prevention Act, 2012, and the Foreign Exchange Regulation Act, 1947.

Key Legislation/Guidance and References:

• Bangladesh Bank/BFIU Circulars:

  • The Bangladesh Financial Intelligence Unit (BFIU), under Bangladesh Bank, has issued multiple circulars and press releases over the years warning the public about the risks and illegality of cryptocurrencies. For example, circulars issued in 2017 and reiterated in subsequent years (e.g., 2021) explicitly state that cryptocurrencies are not legal tender in Bangladesh and dealing in them is prohibited.
  • While specific URLs to older BFIU circulars can sometimes be ephemeral, the official stance is consistently available on the BFIU website or through news releases from Bangladesh Bank.
    • General Information Source: Bangladesh Financial Intelligence Unit (BFIU) website: https://www.bfiu.org.bd/ (Look for news/circulars sections, though specific crypto warnings might be archived or in press releases).
    • Note: Direct public links to specific warning circulars are often not maintained permanently online by central banks, but the policy is widely reported.

• FATF Mutual Evaluation Report (MER) for Bangladesh:

  • The FATF Mutual Evaluation Report of Bangladesh (October 2022) provides an authoritative international assessment.
  • Key Finding (from the MER): The report highlights that Bangladesh has not taken steps to regulate or license VASPs because virtual assets are not permitted in the country. It states that the regulatory framework for virtual assets is non-existent as financial institutions are prohibited from providing services to VAs, and VAs themselves are prohibited.
  • URL for the FATF MER: https://www.fatf-gafi.org/content/fatf-gafi/en/countries-regions/countries/bangladesh/documents/mer-bangladesh-2022.html
    • Refer to Section 4.5 (Recommendation 15: Virtual Assets) for detailed information.

In Summary:

Bangladesh's position is that virtual assets are illegal. Consequently, the FATF Travel Rule, which is designed for legally operating VASPs, has no application or implementation in the country. The focus for enforcement remains on prohibiting virtual asset activities themselves, rather than regulating compliance within them.