Financial Crime World

Title: Bermuda’s Battle Against Money Laundering: A Closer Look at Techniques and Risks

Bermuda’s Commitment to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT)

As an international financial hub, Bermuda is dedicated to maintaining a robust AML/CFT regime in line with international standards. This article provides insights into Bermuda’s money laundering risks and its understanding of the national terrorist financing risk based on the latest assessments.

Bermuda’s National Risk Assessments

  • Money Laundering Risk Assessment (MLRA): Conducted in 2013 and updated in 2017.
  • Terrorist Financing Risk Assessment (TFRA): Conducted in 2016.

Bermuda’s Threat Landscape and Inherent Risks

Bermuda’s overall threat rating for money laundering is medium-high. This is a more comprehensive analysis, not a change in the national situation. Major money laundering threats to Bermuda’s financial institutions and intermediary sectors include:

  • Foreign crimes (fraud, corruption, market manipulation, insider trading, international tax crimes, and foreign bribery)
  • Domestic drug trafficking

Sectoral Threats and Inherent Risks

The sectors with the highest money laundering inherent risk are:

  1. Banking
  2. Securities
  3. Trust service providers (TSP)
  4. Corporate service providers (CSP)

The sectors with medium-high money laundering inherent risk are:

  1. Legal
  2. Insurance (long-term direct)
  3. Money services businesses (MSBs)

Other sectors generally carry medium or lower risks.

Threats and Vulnerabilities to Terrorist Financing

While no evidence of terrorism or terrorist financing has been found in Bermuda, potential vulnerabilities have been assessed:

  • Absence of Casinos: Low threat for casino gaming sector.
  • Not-for-profit sector: Medium sectoral vulnerability to terrorist financing.

Fighting Money Laundering and Terrorist Financing

Bermuda’s government and private sector are taking steps to address AML/CFT threats:

  • Government: Law enforcement and intelligence agencies focusing on financial crimes from the financial services sector.
  • **Private Sector:**Reviewing risk assessment results and ensuring AML/CFT activities align with risk-based approach.

Conclusion

Bermuda’s ongoing efforts to combat money laundering, terrorist financing, and financing of proliferation require continued diligence and hard work.