Financial Crime World

Bermuda’s Financial Institutions Face Medium-High Money Laundering Risk: Report

Hamilton, Bermuda - National Money Laundering and Terrorist Financing Risk Assessment Released by BMA

The Bermuda Monetary Authority (BMA) has published a comprehensive report on the national money laundering and terrorist financing risk assessment for the island nation. The report highlights that Bermuda’s overall threat rating for money laundering is at medium-high, with foreign crimes such as fraud and corruption posing a significant risk.

High-Risk Sectors Identified

The report identifies financial institutions in Bermuda as particularly vulnerable to money laundering risks:

  • Banking: One of the highest inherent risks among all sectors
  • Securities: A high risk due to the potential for fraudulent activities
  • Trust Service Providers (TSPs): High risk due to their involvement in complex transactions and relationships with clients
  • Corporate Service Providers (CSPs): High risk due to their role in managing corporate entities and facilitating financial transactions

Insurance Sector and Stock Exchange Pose Medium-High Risk

The report notes that the insurance sector also poses a medium-high risk, while the Bermuda Stock Exchange has a medium-low risk.

Terrorism and Terrorist Financing Risk Assessment

While there was no evidence of terrorism or terrorist financing in Bermuda, the assessment of sectoral vulnerability was based on potential risk. For most sectors, the sectoral terrorist financing vulnerability was deemed to be either low or medium-low rating.

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Framework

The report emphasizes that financial institutions and designated non-financial businesses and persons are expected to understand the nature and level of the money laundering and terrorist financing risks they face. They must apply AML/CTF policies and procedures to mitigate and monitor these risks.

BMA’s Strengthened Framework

The BMA has been working to strengthen its framework to combat money laundering and terrorist financing, and the report provides a useful foundation for both the BMA and regulated financial institutions to implement their risk-based AML/CTF frameworks.

Digital Asset Business Regime and Impact on CFATF Mutual Evaluation Review (MER)

The BMA’s proposed Digital Asset Business regime is expected to have an impact on Bermuda’s Caribbean Financial Action Task Force (CFATF) Mutual Evaluation Review (MER) later this year. The BMA has been working to ensure that the regulatory framework for digital asset businesses in Bermuda is aligned with international regulatory standards.

Regulated financial institutions can contact their sector-specific representatives at the BMA for AML/CTF related queries:

For general AML/CTF related queries, please email aml@bma.bm.