Financial Crime World

Bermuda Banks Face Tough Compliance Requirements to Combat Money Laundering and Terror Financing

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Banks operating in Bermuda are facing a significant challenge as they strive to meet the island’s stringent compliance requirements designed to combat money laundering and terrorist financing. As a member of the Caribbean Financial Action Task Force (CFATF) and the Financial Action Task Force (FATF), Bermuda has adopted international standards to prevent these financial crimes.

Compliance Requirements

The Proceeds of Crime Act 1997 and the Anti-Terrorism (Financial and Other Measures) Act 2004 have established a Suspicious Activity Reporting regime, which requires banks to disclose any knowledge or suspicion of money laundering or terrorist financing to the Financial Intelligence Agency (FIA). Failure to do so is considered an offence and can result in severe penalties.

Protection from Civil Liability

The same acts provide protection from civil liability for those who make such disclosures. This encourages individuals to report any suspicions of financial crimes, knowing they will be protected from legal repercussions.

National Anti-Money Laundering Committee

The National Anti-Money Laundering Committee was established under the Proceeds of Crime Act 1997 to advise the Minister of Justice on matters related to money laundering and terrorist financing. The committee is responsible for developing a national plan of action against these financial crimes and advising the minister on Bermuda’s participation in international efforts to combat them.

Committee Members

The National Anti-Money Laundering Committee consists of:

  • Chairman, Solicitor General
  • Director of the FIA
  • Financial Secretary
  • Director of Public Prosecutions
  • Permanent Secretary of the Ministry of Justice
  • Commissioner of Police
  • Chief Executive Officer of the Bermuda Monetary Authority
  • Collector of Customs
  • Other persons appointed by the Minister of Justice

Regulations and Supervision

The Proceeds of Crime Act allows the Minister to make regulations for the purpose of detecting and preventing money laundering. In 2008, new regulations were introduced, known as the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008.

The Bermuda Monetary Authority (BMA), Bermuda’s financial regulator, is responsible for licensing, prudential supervision, regulation, and inspection of licensed entities. The BMA ensures compliance with Bermuda’s anti-money laundering and anti-terrorist financing systems and controls through supervision and inspection of affected financial institutions.

Conclusion

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In conclusion, Bermuda banks face tough compliance requirements to combat money laundering and terrorist financing. To ensure effective implementation, the government has established a range of regulations, laws, and agencies to prevent these financial crimes. By understanding the compliance requirements, banks can better navigate this complex landscape and protect themselves from legal repercussions.