AML/ATF Ministerial Advisory 1/2020: Money Laundering and Terrorist Financing controls in higher risk jurisdictions (2020-05-12)

Summary

This is a Ministerial Advisory issued by Bermuda's Minister of Legal Affairs (published via the BMA's AML/ATF guidance page) drawing the regulated sector's attention to FATF's 21 February 2020 public statements on jurisdictions with strategic AML/CFT deficiencies. 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 enhanced due diligence to higher-risk countries, and lists the specific jurisdictions identified by FATF at that time. It states it replaces all previous advisories on this subject.

• Call for action list (black list): DPRK and Iran are identified as high risk; firms must apply counter measures and enhanced due diligence in accordance with the risks, and note that both are also subject to sanctions measures requiring additional action under the International Sanctions Regulations 2013.
• Increased monitoring list (grey list): Albania, The Bahamas, Barbados, Botswana, Cambodia, Ghana, Iceland, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe are identified; firms should take appropriate actions to minimise associated risks, which may include enhanced due diligence in high risk situations.
• Removed from monitoring: Trinidad and Tobago is noted as no longer subject to FATF's increased monitoring process.
• Underlying legal basis: Regulation 11(1)(aa) and 11(1)(ab) of the POCA Regulations require risk-sensitive enhanced customer due diligence for customers or transactions connected to countries identified by FATF/CFATF as higher risk, or otherwise representing higher ML/TF/sanctions risk.

The Advisory applies to all entities and persons covered by Regulation 4 of the POCA Regulations, and cautions that the FATF lists are not exhaustive since many jurisdictions have not yet been reviewed.

Key obligations

• Apply enhanced customer due diligence, on a risk-sensitive basis, to business relationships or transactions connected with jurisdictions identified by FATF as high risk (DPRK, Iran) under Regulation 11(1)(aa) of the POCA Regulations.
• Apply counter-measures in the most serious cases (DPRK, Iran) in accordance with the assessed risks.
• Take appropriate risk-mitigation actions, which may include enhanced due diligence, for customers or transactions connected with jurisdictions on the increased monitoring (grey) list.
• Take additional measures required under the International Sanctions Regulations 2013 for jurisdictions marked as subject to sanctions (DPRK, Iran, Myanmar, Nicaragua, Syria, Yemen, Zimbabwe as listed at the time).
• Read the full FATF statements at Annexes A and B in their entirety to properly determine risk relating to these jurisdictions and factor FATF assessments into AML/CFT systems and controls.

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