Bermuda CPF Guidance: General guidance on countering the financing of proliferation of weapons of mass destruction (May 2025)

Summary

This is general guidance from Bermuda's Financial Sanctions Implementation Unit (FSIU), issued in collaboration with the NAMLC Sanctions Working Group, explaining proliferation financing (PF) risks and Bermuda's sanctions obligations relating to weapons of mass destruction. It is aimed at helping industry and all persons in Bermuda understand PF typologies, red flags, and their existing obligations under Bermuda's international sanctions regime; it does not itself create new legal rules but explains and consolidates existing obligations and expectations.

• Scope and purpose: Explains what proliferation and PF are, the three stages of PF (fundraising, disguising funds, procuring materials), and typologies used by bad actors including DPRK-linked networks.
• Legal basis: Summarises Bermuda's obligations under UNSCRs (including UNSCR 1540, 1718, 2231), FATF Recommendation 7 and related standards, and domestic legislation such as the International Sanctions Act 2003 and International Sanctions Regulations 2013.
• Sanctions compliance duties: Reiterates that designated persons' funds/assets must be frozen without delay and must not be made available directly or indirectly to or for the benefit of designated persons.
• Risk-based approach: Describes expected PF risk assessment and mitigation practices, covering country/geographic risk, customer risk, and product/services risk.
• Red flag indicators: Sets out FATF and sector-specific (account/transaction, trade finance, maritime) risk indicators of potential breach, non-implementation or evasion of targeted financial sanctions on PF.
• Supplementary guidance: Should be read together with the separate 'Bermuda Financial Sanctions: General Guidance for Financial Sanctions' document.

The guidance is informational and interpretive rather than a standalone source of new binding rules; it directs readers to independent legal advice and to up-to-date legislation, and does not set out specific filing deadlines or transitional periods.

Key obligations

• All natural and legal persons in Bermuda, including entities incorporated under Bermuda law, must comply with international sanctions obligations relating to proliferation and PF.
• Freeze without delay the funds or other assets of persons or entities designated for proliferation financing.
• Ensure funds and other assets are not made available, directly or indirectly, to or for the benefit of a designated person.
• Conduct PF risk assessments and implement risk-based mitigation measures covering country, customer, and product/service risk.
• Employ adequate processes and systems to detect, prevent, mitigate, and report proliferation financing activity, including monitoring for identified red flag indicators.
• Follow Bermuda's sanctions compliance reporting process when a breach, non-implementation, or evasion of targeted financial sanctions on PF is suspected or identified.

Applies to

financial services providers, Bermuda-based entities and businesses, legal persons incorporated or formed under Bermuda law, natural persons in Bermuda