AML-ATF Ministerial Advisory 3/2021: Money Laundering and Terrorist Financing controls in higher risk jurisdictions (2021-11-18)

Summary

This is an AML-ATF Ministerial Advisory issued by Bermuda's Minister of Legal Affairs and Constitutional Reform (via the BMA distribution channel), drawing attention to the FATF's October 2021 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 customer due diligence to higher-risk jurisdictions, and lists the specific countries currently identified by FATF.

• Call for Action list (Annex A): North Korea (DPRK) and Iran, treated as high risk requiring counter-measures and enhanced due diligence, and also subject to sanctions measures under the International Sanctions Regulations 2013.
• Increased Monitoring list (Annex B): Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Malta, Mali, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Turkey, Uganda, Yemen and Zimbabwe, for which firms should take appropriate risk-mitigating actions, potentially including enhanced due diligence.
• Sanctions overlay: Jurisdictions marked with an asterisk (DPRK, Iran, Myanmar, Nicaragua, South Sudan, Syria, Yemen, Zimbabwe) are also subject to sanctions measures requiring additional compliance steps under the International Sanctions Regulations 2013.
• Scope of application: Applies to all persons and entities covered by Regulation 4 of the POCA Regulations: AML/ATF regulated financial institutions, independent professionals, casino operators, FIA-registered dealers in high value goods, and real estate brokers/agents.
• Effect on prior advisories: This Advisory replaces all previous ministerial advisories issued on this subject.

The advisory does not itself create new legal rules but operationalises existing Regulation 11(1)(aa) and (ab) obligations by identifying the current FATF-designated jurisdictions that trigger enhanced due diligence and risk-mitigation duties. Firms are expected to read the full FATF statements (Annexes A and B) to properly assess risk, and to note that unlisted jurisdictions may still present higher ML/TF risk under a firm's own risk assessment.

Key obligations

• Apply enhanced customer due diligence, on a risk-sensitive basis, to business relationships or transactions involving persons or countries identified by FATF as high risk (Call for Action list: DPRK, Iran) and apply counter-measures where required, consistent with Regulation 11(1)(aa)-(ab) of the POCA Regulations 2008
• Take appropriate risk-mitigating actions, which may include enhanced due diligence, for business relationships or transactions connected to jurisdictions on the FATF Increased Monitoring list (Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Jordan, Malta, Mali, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Turkey, Uganda, Yemen, Zimbabwe)
• Apply additional measures under the International Sanctions Regulations 2013 for jurisdictions marked with an asterisk that are subject to sanctions measures (DPRK, Iran, Myanmar, Nicaragua, South Sudan, Syria, Yemen, Zimbabwe)
• Read the full FATF statements at Annexes A and B in their entirety to properly determine and document the risks relating to these jurisdictions when implementing AML/CFT systems and controls
• Consider that jurisdictions not yet reviewed by FATF are not automatically low risk, and continue independent risk-based assessment of ML/TF exposure beyond the listed countries

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