Bermuda’s Battle Against Money Laundering and Financial Crime: A FATF Perspective
Bermuda, a British Overseas Territory located in the heart of the Atlantic Ocean, is known for its idyllic beaches, tranquil waters, and thriving financial services sector. However, this financial hub has not been immune to the global scourge of money laundering and terrorist financing. In this article, we provide an insight into Bermuda’s measures to combat these illicit activities based on a recent Mutual Evaluation report published by the Financial Action Task Force (FATF).
About the FATF
The FATF is an international organization founded in 1989 to set standards and promote effective implementation of legal, regulatory, and operational measures to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
FATF Mutual Evaluation Visit to Bermuda
The FATF conducted an on-site visit in Bermuda from September 24 to October 5, 2018. The following report summarizes the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) measures in place in Bermuda as of the date of the visit and analyzes their level of compliance with the FATF 40 Recommendations.
Bermuda’s Progress in Enhancing AML/CFT Framework
The evaluation revealed that Bermuda had made significant progress in enhancing its AML/CFT framework. Some of the steps taken include:
- Improved customer due diligence measures
- Increased transparency in beneficial ownership information
- Strengthened regulatory and supervisory institutions
However, there were still areas where improvements could be made.
Challenges Faced by Bermuda
Effective Implementation of the Risk-Based Approach
While Bermuda had the necessary framework in place, there were concerns regarding its application in practice. The report recommended that Bermuda enhances its cooperation and information sharing mechanisms to facilitate more effective implementation of the risk-based approach.
Limited Data on Suspicious Transactions
Another area of concern was the limited data on suspicious transactions. The report recommended that Bermuda implement a centralized record-keeping system to ensure the collection and analysis of suspicious transaction reports.
Acknowledging the Progress Made
Despite these challenges, the report acknowledged the progress made by Bermuda in enhancing its AML/CFT regime. The regulatory authorities and financial institutions in Bermuda have shown a strong commitment to implementing the necessary reforms.
Conclusion
Bermuda’s ongoing efforts to strengthen its AML/CFT framework are commendable. The FATF Mutual Evaluation report serves as a roadmap for the country to address the remaining challenges and continue its journey towards becoming a global leader in combating money laundering and terrorist financing. The report also underscores the importance of effective international cooperation and information sharing in the fight against these illicit activities.