Financial Crime World

Money Laundering Scrutiny Intensifies in Bermuda: Obliged Entities Brace for Regulatory Duties

Bermuda’s financial institutions and designated non-financial businesses are under increased pressure to comply with the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 as the legislation comes under renewed scrutiny in a crackdown on illicit funds.

Duties of Obliged Entities

The regulations impose several duties on obliged entities to safeguard Bermuda’s financial sector from money laundering and terrorist financing activities. These include:

Customer Due Diligence (CDD) Measures

Institutions must:

  • Employ rigorous CDD procedures when forming a business relationship.
  • Execute CDD procedures when executing occasional transactions.
  • Harboring suspicions of wrongdoing.

Ongoing Monitoring of Business Relationships

Entities must meticulously scrutinize transactions throughout the duration of each relationship to ensure their consistency with the customers’ known profiles and risk levels. Transactions demanding heightened scrutiny include:

  • Complex or unusually large transactions.
  • Patterns that seem devoid of economic or legal rationales.

Record Keeping

Institutions must maintain meticulous records of the evidence amassed during CDD processes and document each transaction.

Reporting Procedures

  • Developing clear reporting protocols.
  • Appointing a Reporting Officer.
  • Affording employees the confidence to share any relevant information.

Audit Functions

  • Independent audits are crucial.
  • Assessing the strength and compliance of an entity’s anti-money laundering and counter-terrorist financing frameworks.

Employee Training

  • Ensuring staff members are well-versed in money laundering and terrorist financing laws.
  • Equipped to identify suspicious transactions.

Designation of a Compliance Officer

Each organization must designate a Compliance Officer to ensure the necessary regulatory procedures are in place and that the compliance program remains consistent with the Regulations.

With Bermuda’s financial landscape facing a higher level of regulatory scrutiny, these obligations assume a pivotal role in securing the integrity of the island’s economy and financial institutions.