The following information outlines the current legislative framework for anti-money laundering and anti-terrorist financing (AML/ATF) in Bermuda. There are significant new legislative initiatives which have recently been introduced including amendments made to the Proceeds of Crime Act 1997 and the Anti-Terrorism (Financial and Other Measures) Act 2004 that came into force on the 15th November 2008. On the 1st January 2009 the Proceeds of Crime Regulations (Supervision and Enforcement) Act 2008 and the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 came into force. Consolidated versions of the amended Acts and copies of the new legislation can be accessed in the Legislation section of this website.
The Proceeds of Crime (Money Laundering) Regulations 1998 have been replaced with the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 which broaden the range of entities regulated and require relevant AML/ATF regulated financial institutions to adopt "risk-based" AML/ATF systems and controls. The new Regulations are detailed and are also available in the Legislation section of this website.
The following financial institutions are subject to the Regulations:
The Bermuda Monetary Authority has been provided with powers to monitor financial institutions for compliance with the Regulations under the Proceeds of Crime Regulations (Supervision and Enforcement) Act 2008 ("the Supervision Act") which came in effect on 1 January 2009. It should be noted that the Supervision Act gives the Authority the capacity to impose substantial penalties for failure to comply with many provisions in the Regulations.
Section 7 of the Supervision Act requires the Authority to publish a Statement of Principles relating to specified powers in the Act. The Statement is in the final stages of preparation and it is anticipated it will be completed shortly. As soon as it is complete, it will be published on this website.
In order to assist AML/ATF regulated financial institutions to comply with the provisions of the Proceeds of Crime Act and Regulations the Bermuda Monetary Authority has issued Guidance Notes with the approval of the Minister. In addition the Authority has published a Statement of Principles relating to how it will exercise of a number of the powers created by the Supervision Act.
Other key enhancements to the legislative framework include:
The establishment of the Financial Intelligence Agency (FIA) which became operational on the 15th November 2008 when the Financial Intelligence Agency Act 2007 came into force. This Act is available in the Legislation section of this website.
The FIA assumes the role previously undertaken by the Financial Investigation Unit of the Bermuda Police Service in relation to suspicious activity reporting. Suspicious Activity Reports should now be filed with the Financial Intelligence Agency.
Amendments to the Proceeds of Crime Act 1997 also modify the composition of the National Anti-Money Laundering Committee and provide for the appointment of a person with relevant experience to be the Chairman for a period not exceeding three years.
Most of the institutions affected by the Regulations are already licensed by the Bermuda Monetary Authority under the various regulatory Acts. For those Institutions there is nothing further that needs to be done.
Some institutions are not currently licensed, however, in particular, institutions excluded or exempted under the Investment Funds Act 2006 or exempted under the Investment Business Act 2003. Such institutions are required by Section 9 of the Supervision Act to be registered with the Authority, and can begin that process by completing a copy of the relevant Application Form A registration fee of $100 is required as part of the application. Section 38 of the Act provides for a period of six months from the date the Act came into force (1 January 2009) for registration to be effected. After that date it is an offence for such an institution to continue to carry on business if it is not appropriately registered.
Bermuda is a member of the Caribbean Financial Action Task Force (CFATF), a regional body of the Financial Action Task Force (FATF). The FATF sets international standards to combat money laundering and the financing of terrorism and has a membership of 170 countries. The FATF has issued 40 recommendations on preventing money laundering and nine special recommendations on combating terrorist financing. All member countries have committed to implementing the FATF standard.
On 19th January 1998 the Proceeds of Crime Act 1997 took effect and expanded the provisions criminalising the laundering of proceeds of criminal conduct and also provided for the confiscation of a convicted person's benefits from criminal conduct
The Proceeds of Crime Act 1997 and the Anti-Terrorism (Financial and Other Measures) Act 2004 establish a Suspicious Activity Reporting regime providing for the disclosure, to the FIA, of a knowledge or suspicion of money laundering or terrorist financing. It is an offence to fail to report such knowledge or suspicion to the FIA. Both Acts provide protection from civil liability that may result from making such a disclosure.
The requirement to report a knowledge or suspicion of money laundering or terrorist financing applies to all persons.
The Proceeds of Crime Act 1997 established the National Anti-Money Laundering Committee for the purpose of:
Members of the National Anti-Money Laundering Committee include: the Chairman, the Solicitor General, the Director of the FIA, the Financial Secretary, the Director of Public Prosecutions, the Permanent Secretary of the Ministry of Justice, the Commissioner of Police, the Chief Executive Officer of the Bermuda Monetary Authority, the Collector of Customs and such other persons as the Minister of Justice may from time to time appoint.
The Proceeds of Crime Act allows the Minister, after consultation with the National Anti-Money Laundering Committee, to make regulations for the purpose of detecting and preventing money laundering. The Minister made new Regulations in this area in 2008 the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008.
The Bermuda Monetary Authority (BMA) is the regulator of the financial services industry and has responsibility for licensing, prudential supervision, regulation and inspection of licensed entities. A strict licensing regime prevents those individuals, inclined on using Bermuda for illicit or criminal purposes, from establishing corporate structures on the island. The BMA ensures compliance with Bermuda's AML/ATF systems and controls through supervision and inspection of affected financial institutions through the Proceeds of Crime Regulations (Supervision and Enforcement) Act 2008.
