AML-ATF Advisory 3/2019 (2020-02-13)

Summary

This advisory, issued by Bermuda's Minister of Legal Affairs and circulated to the regulated sector, flags jurisdictions identified by FATF and CFATF as having strategic AML/CFT deficiencies as of the October and November 2019 FATF and CFATF statements. It reminds relevant persons of their existing obligation under the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 (POCA Regulations) to apply risk-sensitive enhanced due diligence to customers or transactions connected to higher-risk countries, and replaces all prior advisories on this topic.

• Counter-measures and enhanced due diligence required: DPRK and Iran, which are also subject to sanctions under the International Sanctions Regulations 2013 requiring additional measures.
• Enhanced due diligence advised: The Bahamas, Botswana, Cambodia, Ghana, Iceland, Mongolia, Pakistan, Panama, Syria, Trinidad and Tobago, Yemen and Zimbabwe.
• Appropriate risk-mitigation actions advised: Sint Maarten, per the November 2019 CFATF statement.
• Who must comply: AML/ATF regulated financial institutions, independent professionals, casino operators, dealers in high value goods registered with the FIA, and real estate brokers and agents, as covered by Regulation 4 of the POCA Regulations.

The advisory does not create new legal obligations beyond the existing POCA Regulations but directs the regulated sector to read the annexed FATF and CFATF statements in full and factor the identified risks into customer due diligence and ongoing monitoring, noting that unreviewed jurisdictions may still present higher risk even though not listed.

Key obligations

• Relevant persons must apply enhanced customer due diligence on a risk-sensitive basis to customers or transactions connected to jurisdictions identified as high risk by FATF or CFATF, per Regulation 11(1)(aa) and (ab) of the POCA Regulations.
• Relevant persons must apply counter-measures and enhanced due diligence for DPRK and Iran, and comply with additional sanctions measures under the International Sanctions Regulations 2013 for jurisdictions marked as sanctioned.
• Relevant persons should take appropriate actions to minimise risks, including possible enhanced due diligence, for Sint Maarten as identified by CFATF.
• Relevant persons should read the annexed FATF and CFATF statements in their entirety to properly assess and determine risk relating to the listed jurisdictions.

Applies to

AML/AFT regulated financial institutions, independent professionals, casino operators, dealers in high value goods registered with the FIA, real estate brokers and real estate agents

Deadlines

• February 2020: If Iran does not enact the Palermo and Terrorist Financing Conventions by this time, FATF will fully lift the suspension of counter-measures and urge jurisdictions to apply effective counter-measures against Iran.