Bermuda has made significant strides in strengthening its overall Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) regime becoming one of the global leaders in combatting money laundering (ML) and the financing of terrorism (TF) and proliferation. Based upon the global inter-governmental Financial Action Task Force (FATF) Revised 40 Recommendations and Methodology and the FATF's review, the Caribbean Financial Action Task Force (CFATF) issued its mutual evaluation report on the level of technical and effectiveness compliance of Bermuda's anti-money laundering and counter terrorist financing measures based on its 2018 assessment.
Of the 92 published Mutual Evaluation Reports to date, Bermuda is the only country so far to have 39 of the 40 FATF Revised Recommendations rated "largely compliant" or fully "compliant" at their initial Mutual Evaluation (and has the highest Technical Compliance rating with 28 of the 40 Recommendations scored as “compliant”). The report further concluded that Bermuda has a high level of effectiveness with respect to assessing risks and applying a risk-based approach; a result that so far is only shared with the United Kingdom. Overall, Bermuda stands in the top 10 in both effectiveness and technical compliance against the stringent global standards set by the FATF.
The report concluded that the jurisdiction has a high level of understanding of its money laundering and terrorist financing risk and noted that the Island's financial services regulator, the Bermuda Monetary Authority (BMA), has a sound legal and risk-based supervisory framework supported by robust measures in place to effectively identify, assess and understand the money laundering and terrorist financing risks including being "far advanced" in its preparedness in for the Digital Asset sector. The report also noted that Bermuda's AML/CTF supervision measures are robust and that most regulated financial institutions in Bermuda have effectively identified, assessed, managed and mitigated their money laundering and terrorist financing risks.
Alongside the supervisory authorities, the financial institutions of Bermuda and in particular the insurance sector, demonstrated a strong understanding of their exposures to ML/TF risks with supporting mature risk rating frameworks.
As the compliance space is dynamic and continuously evolving, the report identifies certain recommended actions for the jurisdiction to implement which include ensuring that operators in all sectors understand their suspicious activity reporting obligations and that AML/CTF business risk assessments are conducted by the relevant regulated entity in accordance with the BMA's requirements and in line with their review cycles. The report also recommends that financial institutions (and designated non-financial businesses and professionals) be able to demonstrate that they have periodically reviewed and updated their own risk rating methodologies. We can expect the BMA and the Financial Intelligence Agency to increase its focus on these areas in the near future. The report also recommended increasing resources at the Registrar of Companies Compliance Unit to undertake further compliance monitoring, particularly in relation to beneficial registry ownership requirements.
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