AML/ATF Ministerial Advisory 3/2018: Money Laundering and Terrorist Financing controls in higher risk jurisdictions (2018-11-26)

Summary

This is a Ministerial Advisory issued by Bermuda's Minister of Legal Affairs (published via the BMA's AML/ATF guidance page) drawing attention to FATF's October 2018 public statements on jurisdictions with strategic AML/CFT deficiencies. It reminds the Bermuda regulated sector and other 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 identifies the specific jurisdictions FATF flagged at that time.

• 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 FATF identifies as higher risk or that otherwise present higher money laundering, corruption, terrorist financing or sanctions risk.
• Highest risk (apply counter-measures and EDD): Democratic People's Republic of Korea and Iran, both also subject to sanctions measures under the International Sanctions Regulations 2013 requiring additional measures.
• High risk (apply EDD): The Bahamas, Botswana, Ethiopia, Ghana, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen, per FATF's ongoing compliance process (Annex B).
• General guidance: All financial institutions and relevant persons should read the annexed FATF statements in full and take appropriate action, which may include enhanced due diligence, in light of assessed risks; the list of named jurisdictions is not exhaustive since many jurisdictions have not yet been reviewed by FATF.
• Superseding effect: This Advisory replaces all previous advisory notices issued by the Minister of Legal Affairs on this subject.

The Advisory applies to all entities and persons covered by Regulation 4 of the POCA Regulations: AML/AFT regulated financial institutions, independent professionals, casino operators, FIA-registered dealers in high value goods, and real estate brokers and agents. No new deadlines or filing requirements are created; the document operates as a standing reminder to apply existing enhanced due diligence obligations to the named jurisdictions.

Key obligations

• Relevant persons must apply enhanced customer due diligence, on a risk-sensitive basis, to business relationships and transactions involving customers from or in jurisdictions identified by FATF as higher risk, per Regulation 11(1)(aa) and 11(1)(ab) of the POCA Regulations
• Relevant persons must apply counter-measures and enhanced due diligence measures in relation to the Democratic People's Republic of Korea and Iran, including additional measures required under the International Sanctions Regulations 2013 given their sanctioned status
• Relevant persons must apply enhanced due diligence measures in relation to The Bahamas, Botswana, Ethiopia, Ghana, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen in accordance with the risks presented
• Financial institutions and relevant persons should read the full FATF statements (Annexes A and B) and take appropriate action based on the assessed risks, recognising that unreviewed jurisdictions may also present higher risk

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