AML/ATF Ministerial Advisory 1/2021: Money Laundering and Terrorist Financing controls in higher risk jurisdictions (2021-03-25)

Summary

This is a Ministerial Advisory issued under Bermuda's Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 (POCA Regulations), drawing the regulated sector's attention to the FATF's and CFATF's February 2021 public statements on jurisdictions with strategic AML/CFT deficiencies. It replaces all previous advisories on this topic and directs firms to apply enhanced due diligence measures based on the risk level of the jurisdictions listed.

• Who it applies to: All entities and persons subject to the POCA Regulations under Regulation 4: AML/ATF regulated financial institutions, independent professionals, casino operators, dealers in high value goods registered with the FIA, and real estate brokers and agents.
• Highest-risk jurisdictions (call for action): Democratic People's Republic of Korea and Iran are to be considered high risk; firms must apply counter-measures and enhanced due diligence in accordance with the risks, and note that additional sanctions obligations apply under the International Sanctions Regulations 2013.
• Jurisdictions under increased monitoring: Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, Syria, Uganda, Yemen and Zimbabwe are to be treated as warranting appropriate risk-mitigating action, which may include enhanced due diligence in high-risk situations.
• Sanctions-linked jurisdictions: DPRK, Iran, Myanmar, Nicaragua, Syria, Yemen and Zimbabwe are also flagged as subject to international sanctions measures requiring additional compliance steps.
• CFATF update: Sint Maarten has exited the CFATF's Third Round Follow-Up Process, reflecting improved AML/CFT compliance.

The advisory is informational guidance implementing existing regulatory duties rather than creating new rules; it reminds firms of their existing obligation under Regulation 11(1)(aa) and (ab) of the POCA Regulations to apply risk-sensitive enhanced due diligence to customers and transactions connected with higher-risk countries identified by FATF or CFATF.

Key obligations

• Apply enhanced customer due diligence, on a risk-sensitive basis, to business relationships and transactions involving persons or transactions from or in jurisdictions identified by FATF or CFATF as higher risk, per Regulation 11(1)(aa) and (ab) of the POCA Regulations.
• Apply counter-measures and enhanced due diligence measures for business connected to the Democratic People's Republic of Korea and Iran.
• Take appropriate risk-mitigating action, which may include enhanced due diligence, for business connected to Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Senegal, Syria, Uganda, Yemen and Zimbabwe.
• Consider and apply additional measures required under the International Sanctions Regulations 2013 for jurisdictions marked as subject to sanctions (DPRK, Iran, Myanmar, Nicaragua, Syria, Yemen, Zimbabwe).
• Read the annexed FATF and CFATF statements in full to properly assess and determine jurisdiction-specific risk before applying due diligence measures.

Applies to

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