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Vulnerability Assessment Reveals High-Risk Sectors in Bermuda’s Financial System
A recent assessment by the Government of Bermuda has identified several sectors as being particularly vulnerable to money laundering (ML) and terrorist financing (TF). The report, released today, highlights the need for increased vigilance and cooperation among financial institutions, regulatory bodies, and law enforcement agencies.
High-Risk Sectors
According to the assessment, the following sectors are considered to be at high risk of ML and TF:
- Banking
- Securities
- Trust service providers
- Corporate service providers
These sectors were found to have inherent vulnerabilities that make them more susceptible to criminal activity.
Medium-High to Medium-Low Risk Sectors
The legal, insurance (long-term direct), and money services businesses sectors were identified as having medium-high ML risk. Dealers in precious metals, real estate, betting, and gaming were classified as medium-risk. The Bermuda Stock Exchange, accountants, and dealers in high-value goods were deemed to have a medium-low ML risk.
Casino Gaming Sector
The assessment also found that the casino gaming sector was given a low threat rating due to the lack of casinos operating in Bermuda.
Terrorism Financing Risk
While there is no evidence of terrorism or terrorist financing in Bermuda, the report notes that the assessment was based on potential risk. For most sectors, the TF vulnerability was deemed to be either low or medium-low, with only the not-for-profit sector assessed at a medium rating.
Combating Money Laundering and Terrorist Financing
To combat ML and TF, the Government of Bermuda has imposed extensive requirements for controls across various sectors. The implementation of these controls is ongoing, with financial institutions that have been subject to AML obligations and supervision for an extended period of time generally having greater awareness and understanding of AML matters.
Prioritized Action Items
The report notes that Bermuda’s commitment to safeguarding its financial system from abuse by criminal elements has led to key action items being given high priority. Legislative, institutional, and operational changes have already been implemented, and the work is ongoing.
Next Steps
“The results of these risk assessments continue to be incorporated into our ever-evolving national strategy and action plan,” said a government spokesperson. “We are committed to continually improving our understanding of ML and TF risk in Bermuda and strengthening our AML/ATF framework.”
Private sector institutions are urged to review the results of these risk assessments and ensure that their AML/ATF activities reflect a risk-based approach. AML/ATF efforts should be focused on threats and vulnerabilities most relevant to each sector.
Conclusion
With continued diligence and hard work, Bermuda is committed to effectively combating money laundering, terrorist financing, and other financial crimes.