Identity Verification: The Key to Unlocking Bermuda’s Due Diligence Requirements

Complying with Stringent Regulations

The Bermuda government has implemented robust anti-money laundering (AML) and know-your-customer (KYC) regulations to combat money laundering and terrorist financing. At the heart of these regulations is the requirement for businesses to verify the identities of their customers.

Identity Verification: The Essential Step

According to Bermuda’s Financial Intelligence Agency, identity verification is a critical component of due diligence that helps to prevent fraud and ensure compliance with AML/KYC regulations. Businesses must verify the identities of their customers by obtaining and verifying certain identifying information, including:

• Name
• Date of birth
• Address
• Proof of identity

When to Verify Identity

Identity verification is not a one-time process, but rather an ongoing requirement that applies to multiple instances, such as:

• Onboarding new customers
• Processing transactions
• Verifying the identities of Politically Exposed Persons (PEPs)

Relationship with Third-Party Services

Businesses may seek the services of third-party providers to apply measures of due diligence, including identity verification. However, they remain liable for maintaining all compliance and fulfilling AML/KYC obligations.

Record Retention

As part of their AML/KYC obligations, businesses are required to retain data for not less than five years. This includes:

• Collecting and managing data processed by third-party providers without undue delay
• Retaining relevant data for at least five years

Conclusion

In conclusion, identity verification is a critical component of due diligence that helps to prevent fraud and ensure compliance with Bermuda’s AML/KYC regulations. Businesses must verify the identities of their customers and PEPs in multiple instances and retain relevant data for at least five years. Failure to comply can result in severe penalties, including fines and even criminal prosecution.