Bermuda Monetary Authority Issues Updated Guidance Notes for Financial Institutions

The Bermuda Monetary Authority (BMA) has released an updated version of its Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Guidance Notes. These guidelines provide financial institutions with clear guidance on how to comply with regulatory requirements, superseding previous versions.

Key Changes to the 2023 Guidance Notes

The updated guidelines incorporate more prescriptive language, providing regulated financial institutions (RFIs) with specific guidance on how to meet regulatory requirements. Some key changes include:

• Increased Emphasis on Auditor Qualification: The guidelines state that expertise and proficiency may be demonstrated through continuing training, professional education focused on AML/ATF, and internationally recognized certifications.
• Customer Due Diligence Clarified: RFIs must now identify and verify specific information for all customers, including proof of address. The guidelines also specify acceptable documents for verifying identity, including electronic verification methods.

Guidelines Overview

The 2023 Guidance Notes provide clear guidance on the following areas:

Customer Due Diligence

• Identify and verify specific information for all customers
• Proof of address is required
• Acceptable documents for verifying identity include:
  • Electronic verification methods
  • Passport or national ID card
  • Utility bills or bank statements

Simplified Due Diligence (SDD)

• Updated guidance on when SDD can be applied by RFIs
• Aimed at providing greater clarity and consistency in the application of SDD

Reliance Requirements

• No “chain” or “passing on” of reliance involving more than two persons or institutions
• Emphasis on direct knowledge and understanding of customer information

Sanctions Risk Assessment Guidelines

• Additional details on how RFIs can conduct and document their exposure to sanctions-related risks
• Guidance on assessing and mitigating potential risks associated with sanctioned entities and individuals

BMA’s Commitment to Regulatory Compliance

The BMA’s updated guidelines reflect its ongoing commitment to ensuring that financial institutions in Bermuda adhere to strict AML/ATF compliance standards. The new guidelines are designed to provide RFIs with the necessary tools and guidance to mitigate financial crime risks and maintain a safe and secure financial system.

If you have any questions or would like additional information on these updated guidelines, please do not hesitate to contact us.