Financial Crime World

Bermuda’s Anti-Money Laundering and Anti-Terrorist Financing Framework: A Comprehensive Approach

Bermuda, a leading financial hub in the Caribbean, has implemented a robust anti-money laundering (AML) and anti-terrorist financing (ATF) framework to ensure the integrity of its financial system. The framework is designed to prevent the misuse of its financial system for criminal activities and to comply with international standards.

Key Components

The AML/ATF framework in Bermuda is built around several key components, including:

  • Legislation: A range of laws, such as:
    • Revenue Act 1898
    • Criminal Code Act 1907
    • Proceeds of Crime Act 1997 Provide the legal basis for AML/ATF measures.
  • Regulations: The Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 set out specific requirements for Reporting Financial Institutions (RFIs) to comply with AML/ATF standards.
  • Guidance Notes: Sector-specific guidance notes have been issued for:
    • Digital asset businesses
    • Money service businesses
    • Securities sector
    • Corporate service providers
    • Trust businesses
    • Long-term insurance businesses
  • International Standards: Bermuda’s AML/ATF framework is aligned with international standards, including:
    • FATF Recommendations (as amended June 2019)
    • United Nations Security Council resolutions

Risk-Based Approach

The BMA has adopted a risk-based approach to AML/ATF compliance, requiring RFIs to:

  • Identify risks associated with their business activities
  • Assess those risks
  • Mitigate the identified risks

This approach is designed to increase effectiveness while minimizing costs.

Senior Management Responsibilities

Senior management of RFIs are responsible for ensuring that their institutions comply with AML/ATF requirements. They must be fully engaged in decision-making processes and take ownership of the risk-based approach. Senior management is accountable where the approach is determined to be inadequate.

Extra-Territorial Matters

RFIs operating in Bermuda or linked to a country or territory other than Bermuda must consider:

  • Sanctions applicable to those jurisdictions
  • AML/ATF measures applicable to those jurisdictions
  • Monitor changes to these requirements and seek advice on their implications

Regulatory Priorities

The regulation of RFIs is provided by the:

  • BMA (Banking and Monetary Affairs)
  • FIA (Financial Intelligence Agency) supervises relevant persons dealing in high-value goods
  • Superintendent of Real Estate regulates real estate brokers or agents
  • Barristers and Accountants AML/ATF Board oversees barristers and accountants

By implementing a comprehensive AML/ATF framework, Bermuda is committed to maintaining a secure and transparent financial system that supports economic growth while protecting against money laundering and terrorist financing.