Bermuda Tightens Anti-Money Laundering Regulations

The Bermuda Monetary Authority (BMA) has released an updated version of its Anti-Money Laundering and Anti-Terrorist Financing Guidance Notes (2023 GN). This new guidance provides financial institutions with more prescriptive language on how to comply with regulatory requirements.

Key Updates in the 2023 Guidance Notes

The 2023 Guidance Notes replace earlier versions and supersede existing sector-specific guidance, effective February 13, 2023. The updates aim to strengthen anti-money laundering (AML) and anti-terrorist financing (ATF) compliance in Bermuda. Key changes include:

• More Prescriptive Language: Specific guidance on regulatory requirements is provided for regulated financial institutions.
• Division of Responsibilities: Clarification of the division of responsibilities among regulatory bodies in Bermuda and a list of BMA’s enforcement powers are outlined.
• Auditor Qualifications: Adequate qualification of independent auditors, including expertise and proficiency in AML/ATF through continuing training and internationally recognized certifications, is emphasized.
• Customer Due Diligence:
  • Identification and verification of proof of address
  • Acceptable documents for electronic verification
• Simplified Due Diligence (SDD) and Reliance Requirements: Clarification on the application of SDD and reliance requirements, with a clear prohibition on ‘chain’ or ‘passing on’ of reliance involving more than two persons or institutions.
• Sanctions Risk Assessments: Additional details on conducting and documenting sanctions risk assessments are provided.

Enhancing AML/ATF Compliance in Bermuda

The updates aim to enhance AML/ATF compliance in Bermuda, ensuring that financial institutions prioritize the prevention of financial crime and protect the integrity of the country’s financial system.