Exchange Control Act 1972

Summary

This is Bermuda's foundational exchange control statute. It does not itself impose day to day compliance duties on businesses; instead it empowers the Minister of Finance to make regulations controlling dealings in gold, foreign currency, securities and related transactions, and gives the Bermuda Monetary Authority's Controller of Foreign Exchange enforcement and information gathering powers, including in relation to beneficial owners.

• Regulatory scope: The Minister may make regulations covering dealings in gold and foreign currency, payments to persons resident outside Bermuda, issue and transfer of securities, bearer certificates, import/export of currency and documents, blocked accounts, transfer of policies of assurance, settlement of property on non-residents, and duties relating to foreign companies.
• Beneficial ownership: The Controller of Foreign Exchange may be empowered by regulation to obtain information from any person subject to the Act, including information relating to beneficial owners.
• Enforcement powers: Magistrates may issue search warrants where there is reasonable suspicion of an offence against the regulations; seized articles or documents may be detained for up to three months or until related proceedings conclude.
• Offences and penalties: Breach of regulations can attract criminal penalties (fines up to $5,000 or two years imprisonment on indictment, or larger multiples of the value involved) or civil penalties up to $25,000, plus forfeiture of the property concerned.
• Obstruction offence: Obstructing a person exercising search or evidence-detention powers under sections 3 or 4 is itself a summary offence punishable by a fine of $1,000 or three months imprisonment, or both.
• Prosecution control: No prosecution for an offence under the Act or its regulations may be brought without the consent of the Director of Public Prosecutions.

Most operative exchange control obligations arise from regulations made under this Act rather than from the Act's text itself, so entities should also check the specific regulations currently in force for concrete filing, disclosure or transaction-control requirements.

Key obligations

• Provide information to the Controller of Foreign Exchange, including beneficial ownership information, when required under regulations made pursuant to this Act
• Do not obstruct any person exercising search warrant or evidence-detention powers under sections 3 or 4, as this is a criminal offence
• Comply with any directions or notices issued by the Controller of Foreign Exchange for administration and enforcement of exchange control regulations
• Ensure prosecutions for offences under the Act or its regulations are only pursued with the consent of the Director of Public Prosecutions (a constraint on enforcement rather than on regulated entities)

Applies to

authorised dealers, persons resident outside Bermuda, bankers authorised to open blocked accounts, foreign companies, persons dealing in gold, foreign currency or securities, beneficial owners

Related documents

• Consultation Paper - Proposed Amendments to the Exchange Control Act 1972 and Exchange Control Regulations 1973 (2018-02-01) amends this document
• Exchange Control Regulations 1973 is made under this document