Financial Crime World

Bermuda’s Financial Institutions Face Medium-High Money Laundering Risk Assessment Reveals

National Risk Assessment Highlights Medium-High Money Laundering Risk to Bermudian Financial Institutions

The Bermuda Monetary Authority (BMA) played a key role in the preparation of the country’s latest National Risk Assessment (NRA), which has revealed that Bermudian financial institutions face a medium-high risk of money laundering. The assessment, led by the National Anti-Money Laundering Committee (NAMLC), was conducted to identify the risks posed by money laundering and terrorist financing in Bermuda.

Foreign Crimes Pose High Money Laundering Risk

The report identified foreign crimes such as:

  • Fraud
  • Corruption
  • Market manipulation/insider trading
  • International tax crimes
  • Foreign bribery and corruption

as having a high money laundering risk. These offenses have the potential to generate significant funds that can be laundered through Bermuda’s financial institutions.

Sectors at High Risk of Money Laundering

The assessment revealed that the following sectors are at the highest inherent risk of money laundering:

  • Banking
  • Securities
  • Trust service providers
  • Corporate service provider

Insurance companies (Long-Term direct) and money services businesses were identified as having medium-high inherent risks, while the Bermuda Stock Exchange has a medium-low inherent risk.

Terrorist Financing Risk Assessment

The report assessed terrorist financing to have no evidence of taking place in Bermuda. However, the potential risk was deemed low or medium-low for most sectors.

Regulatory Expectations

Financial institutions and designated non-financial businesses and persons are expected to understand the nature and level of money laundering and terrorist financing risks they face and apply anti-money laundering/anti-terrorist financing policies and procedures to mitigate and monitor these risks.

BMA’s Risk-Based Supervisory Framework

The BMA uses a risk-based supervisory framework in undertaking its anti-money laundering/anti-terrorist financing mandate. The findings from the NRA provide a useful foundation for both the BMA and regulated financial institutions to effectively implement their risk-based AML/ATF frameworks.

Proposed Digital Asset Business Regime

Separately, the BMA’s proposed Digital Asset Business regime is expected to have an impact on Bermuda’s Caribbean Financial Action Task Force (CFATF) Mutual Evaluation Review (MER) held later this year. The BMA will be implementing a robust risk-based supervisory approach for financial entities operating digital asset businesses in Bermuda.

Contact Information

For more information, the public can contact the BMA’s sector-specific representatives at [insert contact email addresses].