Title: Bermuda’s Financial Regulators Unveil Money Laundering Typologies Report: Corruption and Tax Offenses on the Rise
Overview
The Financial Intelligencce Analysis Unit (FIA) in Bermuda has released its annual Money Laundering Typologies report for the period of 2013 to 2015. This report provides insights into the two most common suspicious activity reports (SARs) filed during this period: corruption and tax offenses.
Objectives of the Report
The primary goal of this report is to identify potential and actual illegal activity linked to money laundering and other predicate offenses. Additionally, it aims to educate reporting entities and individuals about various techniques used by criminals to launder criminal proceeds.
Corruption: A Hidden Epidemic
One significant finding from the report was the increase in the number of SARs related to corruption, both locally (53) and internationally (8). Indicators of suspected corruption activity include:
- Adverse media
- Beneficial ownership
- Company
- Consent request
- Corruption
- Criminal history
- Legal arrangements
Case Studies
The report provides case studies highlighting the importance of monitoring open source information and implementing proper Know Your Customer (KYC) measures. These cases involved individuals from various nationalities like American, Mexican, and Argentinian.
Politically Exposed Persons and Corruption
The report also explores Politically Exposed Persons (PEPs) and their involvement in money laundering and corruption. PEPs are individuals who hold or have held public functions, and corruption is the abuse of power for private gain, often undetected due to the individuals’ influence and power.
Out of the total SARs filed during the period, over 90% (55) involved PEPs. These reports showed PEPs often concealing funds in the names of family members, friends, or associates.
Tax Offenses: A Growing Challenge
The report also addresses an increase in SARs filed due to tax offenses. This increase can be attributed to the implementation of the Foreign Account Tax Compliance Act (FATCA), which required financial institutions in Bermuda to comply.
Case Studies
Two case studies on tax evasion in the report emphasize the importance of monitoring cash transactions and identifying individuals attempting to move funds across borders to avoid taxes.
Conclusion
The FIA’s Money Laundering Typologies report offers essential insights into the rising instances of corruption and tax offenses in Bermuda. It calls to action for reporting entities and regulatory authorities to be vigilant and adapt to the evolving money laundering landscape. Proper KYC measures, monitoring open source information, and employee education on money laundering typologies and red flags are essential components of maintaining a safer financial environment.