Financial Crime World

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Bermuda Monetary Authority Issues Updated Anti-Money Laundering Guidance 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. This new guidance provides financial institutions with clearer directions on how to comply with regulatory requirements, superseding earlier versions and reflecting a continued focus on strengthening AML/TF compliance.

Key Changes in the Updated Guidelines

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

  • Adequate Qualification for Independent Auditors: The 2023 GN emphasize the importance of adequate qualification for independent auditors, stating that expertise and proficiency may be evidenced by continuing training, professional education focused on AML/TF, and internationally recognized certifications.
  • Customer Due Diligence: The guidelines provide clarification regarding customer due diligence, including information that must be identified and verified for all customers. Specifically:
    • Proof of address is now clearly defined as a requirement for verification
    • Acceptable documents for verification of identity are specified, including electronic verification methods
  • Simplified Due Diligence (SDD): RFIs receive more specific guidance on when SDD can be applied, with the guidelines making it clear that there can be no ‘chain’ or ‘passing on’ of reliance involving more than two persons or institutions.
  • Sanctions-Related Risks: The 2023 GN provide more details on how to conduct and document a RFI’s exposure to sanctions-related risks.

Impact on Financial Institutions

The updated AML/TF guidance notes are expected to have significant implications for financial institutions operating in Bermuda. With more prescriptive language and clearer guidelines, RFIs will be required to enhance their compliance programs and mitigate financial crime risks. Financial institutions seeking further information or clarification on the 2023 GN should contact the relevant regulatory bodies or consult with a qualified professional advisor.