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KYC Customer Due Diligence in Bermuda: A Regulatory Overview

The Proceeds of Crime (Money Laundering) Regulations 1998 introduced an anti-money laundering framework for institutions such as banks, trust companies, insurance entities, and others. These entities were defined as Regulated Institutions.

Evolution of Regulations

In 2009, the regulations were superseded by the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008. This updated framework imposes more detailed obligations on affected financial institutions regarding:

  • Customer due diligence
  • Record keeping
  • Systems
  • Staff training
  • Internal reporting procedures
  • Appointment of a reporting officer

Regulatory Guidance and Oversight

To assist regulated financial institutions in complying with the Proceeds of Crime Act and Regulations, the Bermuda Monetary Authority has issued:

  • General AML/ATF Guidance Notes with the approval of the Minister
  • Sector-Specific AML/ATF Guidance Notes for various industries
  • A Statement of Principles outlining how it will exercise its powers under the Supervision Act

Recent Developments and Clarity

In recent years, the Authority has released ministerial advisories and guidance notes to provide further clarity on anti-money laundering and counter-terrorist financing controls. These include:

  • Sector-specific guidance for:
    • Trust business
    • Corporate service providers
    • Money service businesses
    • Securities
    • Digital asset businesses
    • Long-term insurance business

Goal of Regulatory Efforts

The Bermuda Monetary Authority’s efforts aim to ensure that regulated financial institutions are equipped with the necessary tools and guidance to effectively identify and mitigate risks associated with money laundering and terrorist financing. The regulator continues to issue updated advisories and guidance notes to reflect changes in the regulatory landscape and emerging threats.

Compliance and Integrity

By understanding the requirements and guidelines outlined by the Bermuda Monetary Authority, financial institutions can ensure compliance with anti-money laundering and counter-terrorist financing regulations, ultimately protecting the integrity of the financial system and preventing illicit activities.