AML-ATF Ministerial Advisory 1/2024: Money Laundering and Terrorist Financing controls in higher risk jurisdictions (2024-03-27)

Summary

This Ministerial Advisory from Bermuda's Minister of Legal Affairs draws the regulated sector's attention to the FATF's February 2024 public statements identifying jurisdictions with strategic deficiencies in their AML/CFT regimes. It sets out which countries should be treated as high risk under the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 (POCA Regulations) and what due diligence response is expected for each. It replaces all previous advisories on this subject.

• Legal basis: Regulation 11(1)(aa) and 11(1)(ab) of the POCA Regulations require relevant persons to apply enhanced customer due diligence, on a risk-sensitive basis, to customers or transactions linked to countries identified by FATF or CFATF as higher risk, or otherwise representing higher ML/TF/corruption/sanctions risk.
• Call for Action jurisdictions: DPRK, Iran and Myanmar must be treated as high risk, with counter-measures and enhanced due diligence applied in accordance with the risks (Annex A).
• Increased Monitoring jurisdictions: Bulgaria, Burkina Faso, Cameroon, DR Congo, Croatia, Haiti, Jamaica, Kenya, Mali, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Turkiye, Vietnam and Yemen require appropriate risk-mitigating actions, which may include enhanced due diligence (Annex B).
• Sanctions overlay: Jurisdictions marked with an asterisk (DPRK, Iran, Myanmar, DR Congo, Haiti, Mali, South Sudan, Syria, Yemen) are also subject to sanctions measures requiring additional actions under the International Sanctions Regulations 2013.
• Russia-related risks: Annex C reiterates FATF's call for continued vigilance regarding Russia's financial connectivity with countermeasure-subject countries, proliferation financing, and cyber/ransomware risks.

The Advisory notes the lists are not exhaustive, as many jurisdictions have not yet been reviewed by FATF, and firms must still consider unlisted jurisdictions that may present higher ML/TF risk under their own risk assessments.

Key obligations

• Relevant persons must apply enhanced customer due diligence, on a risk-sensitive basis, to customers or transactions connected to countries identified by FATF/CFATF as higher risk (Regulation 11(1)(aa) and (ab) of the POCA Regulations).
• For DPRK, Iran and Myanmar (Call for Action jurisdictions), firms must consider them high risk and apply counter-measures and enhanced due diligence measures commensurate with the risk.
• For jurisdictions under increased monitoring (grey list), firms must take appropriate actions to minimise associated risks, which may include enhanced due diligence in high-risk situations.
• Firms dealing with asterisked jurisdictions subject to sanctions must take additional measures required under the International Sanctions Regulations 2013.
• All financial institutions and relevant persons must read the annexed FATF statements in full to properly determine and act on the risks relating to these jurisdictions.
• Firms must continue to assess unlisted jurisdictions that may present higher ML/TF risk, since the FATF lists are not exhaustive.

Applies to

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