Financial Crime World

Title: Bermuda’s Stringent AML-KYC Regulations: An Overview of Identity Verification Requirements

1. Introduction

Bermuda’s comprehensive framework to prevent Money Laundering and Terrorist Financing, known as the ‘Bermuda AML-KYC Regulations,’ came into force to criminalize money laundering and impose suitable safeguards. This article serves as a reference guide to the specific identity verification requirements under Bermuda’s regulations.

2. Background

  • Bermuda’s Proceeds of Crime (Anti-money Laundering and Anti-terrorist Financing) Regulations 2008 set the legal basis for money laundering and terrorist financing prevention.
  • This document focuses on the necessary identity verification procedures as outlined in the Act.

3. Scope

  • The ‘Bermuda AML-KYC Regulations’ summarizes key provisions regarding identity verification for both organizations and individuals in Bermuda.

4. Definitions

  • Client: Shufti Pro’s customer
  • Customer: Client’s customer subjected to KYC-AML checks
  • End-user: From Shufti Pro’s perspective, the client’s customer
  • Document Verification: Confirming document authenticity
  • Identity Verification: Verifying client’s customers’ identities
  • Proof of Identity: Government-issued identity documents
  • EDD (Enhanced Due Diligence): Greater scrutiny for potential business relationships
  • Third-Party Diligence: Outsourcing due diligence to external parties
  • PEP (Politically Exposed Person): Individuals with higher risks for potential involvement in bribery and corruption
  • Due Diligence: Risk mitigation measures before transactions or agreements

5. Identity Verification Requirements

5.1. Identity Verification Procedures

Under Bermuda’s regulations, identity verification must use specific attributes from official documents: Name, Place of Birth, and Address.

5.2. Compliant CDD (Customer Due Diligence) Methods

  • Independent Sourced Documents Verification: For End-users who do not present themselves for physical presence verification
  • Document Verification: Utilizing specialized Document Verification service for checks on document authenticity

6. Required Documents for Verification

  • Proof of Identity: Passport, Driving License, other valid photo ID
  • Address Verification: Utility bills, government department-issued documents, bank statements

7. Timing of Verification

  • Identity verification procedures are not one-time but recurring
  • Applicable during: new Customer onboarding, dealing with transaction data, and high-risk situations

8. Politically Exposed Persons (PEPs) and EDD Measures

  • EDD requirements oblige entities to determine if their Customer is a PEP or holds public office
  • Shufti Pro’s AML Screening service can identify individuals against global regulatory authorities’ watchlists, domestic databases, compromised PEPs, and sanctioned individuals

9. Reliance on External Services

  • Organizations can seek third party services for due diligence
  • Shufti Pro offers expert third-party services for identity verification, document verification, and AML screening
  • Despite third-party reliance, the Client remains liable for maintaining all necessary AML/KYC compliance

10. Record Retention

  • Regulations require data retention for a minimum of five years
  • Clients must collect due diligence data from external parties without undue delay

By staying informed about Bermuda’s identity verification requirements and utilizing Shufti Pro’s comprehensive solutions, organizations can efficiently comply with AML and KYC obligations while maintaining a robust, transparent, and compliant business environment.