Financial Crime World

KYC Customer Due Diligence in Bermuda: A Must-Know for Businesses

Bermuda’s anti-money laundering and anti-terrorism financing (AML/ATF) regulations are strict, and businesses operating on the island must comply with them to avoid penalties.

Overview of Supervisory Authorities

The Proceeds of Crime (Anti-Money Laundering and Anti-Terrorism Financing) Regulations of 2008 establish several supervisory authorities responsible for monitoring AML/ATF compliance. These authorities include:

  • Bermuda Monetary Authority: Regulates financial organizations and insurers operating in or out of the country.
  • Superintendent of Real Estate: Oversees brokers and real estate agents.
  • Authorized Professional Organization: For regulated individuals.
  • Registrar for High Value Goods Dealers: Responsible for monitoring high-value goods dealers.
  • Bermuda Gaming Commission: Regulates casino owners.

Financial Intelligence Agency (FIA)

The FIA is responsible for receiving, gathering, storing, analyzing, and disseminating information related to suspected proceeds of crime and potential terrorism financing. This includes Suspicious Activity Reports (SARs) submitted by entities.

Compliance Requirements

Complying with AML/ATF regulations in Bermuda requires businesses to follow strict guidelines. The Proceeds of Crime Regulations impose several obligations on obliged entities, including:

  • Conduct Customer Due Diligence: When starting a business relationship or conducting a one-time transaction, and whenever there is suspicion of money laundering or terrorism financing.
  • Investigate Transactions: During the duration of a business relationship to ensure they are compatible with the customer’s understanding, their business, and their risk profile.
  • Keep Records: Of all current papers, data, and information gathered for customer due diligence steps.
  • Maintain Proof of Transactions: And proof of customer due diligence.
  • Report Suspicious Activity: To a designated reporting officer.
  • Provide Staff Training: On the laws governing money laundering and terrorism financing, as well as identifying and handling related transactions.
  • Select a Compliance Officer: Who will ensure adherence to the regulations.

Reporting Suspicious Activity

Businesses in Bermuda must report suspicious activity to the Financial Intelligence Agency via a Suspicious Activity Report (SAR). The agency uses this information to identify and disrupt money laundering and terrorism financing schemes. Failure to comply with AML/ATF regulations can result in penalties, fines, and even criminal charges.

Conclusion

In conclusion, businesses operating in Bermuda must take customer due diligence seriously to avoid non-compliance with the island’s strict anti-money laundering and anti-terrorism financing regulations. By understanding their obligations and reporting suspicious activity, companies can help keep Bermuda’s financial system safe from illicit activities.