Bermuda’s Financial Sector Faces Highest ML Risk from Banking, Securities, and Trust Service Providers
Hamilton, Bermuda - A recent comprehensive assessment has identified the financial sectors with the highest risk of money laundering (ML) and terrorist financing (TF), with banking, securities, and trust service providers deemed to be at the greatest risk.
High-Risk Sectors
According to the report, these sectors have inherent vulnerabilities that make them more susceptible to ML/TF threats. The assessment, conducted by Bermuda’s competent authorities, also identified other high-risk sectors, including:
- Corporate service providers
- Legal services
- Insurance (long-term direct)
- Money services businesses
Medium-Risk Sectors
Deal-makers in the following industries were identified as being at medium risk:
- Precious metals
- Real estate
- Betting
- Gaming
Additionally, the Bermuda Stock Exchange, accountants, and dealers in high-value goods are considered to have a medium-low ML inherent risk.
Low-Risk Sectors
The casino gaming sector was given a low threat rating due to the absence of casinos operating in Bermuda. There is also no evidence of terrorism or terrorist financing having taken place in Bermuda.
Government Response
The Government of Bermuda has implemented extensive requirements for controls across various sectors to reduce ML/TF risks. However, the private sector’s implementation of these controls varies, with financial sectors that have been subject to anti-money laundering (AML) obligations and supervision for an extended period generally having greater awareness and understanding of AML matters.
Prioritized Action Items
To mitigate risks, key action items have been prioritized to ensure the continued effectiveness of Bermuda’s AML/ATF framework. These include:
- Reviewing and updating the national strategy and action plan
- Incorporating the results of these risk assessments into the ongoing national strategy and action plan
- Focusing intelligence and law enforcement on financial crimes stemming from the financial services sector
- Concentrating supervisors on sectors and entities with prominent vulnerabilities
Conclusion
The report emphasizes that Bermuda’s AML/ATF framework has already shown a positive impact, and continues to be reviewed and updated. The results of these risk assessments will be incorporated into the ongoing national strategy and action plan, ensuring the continued effectiveness of Bermuda’s anti-money laundering and terrorist financing efforts.