Financial Sanctions Guidance (Bermuda, September 2018)

Summary

This is guidance issued by Bermuda's Financial Sanctions Implementation Unit (FSIU), part of the Ministry of Legal Affairs, explaining how Bermuda implements UK/UN/EU financial sanctions under the International Sanctions Act 2003 and International Sanctions Regulations 2013. It is aimed at any person, business or profession that may hold, control or deal with funds or economic resources belonging to designated persons, and sets out reporting, licensing and compliance expectations rather than creating new legal rules itself.

• Asset freezes: Explains what an asset freeze requires: freezing funds and economic resources of designated/listed persons and not making funds or resources available to them, directly or indirectly.
• Reporting: Sets out who must report to the FSIU (relevant institutions, businesses and professions), what must be reported (knowledge or suspicion of a breach or that a customer is a designated person), how to report, and record keeping expectations.
• Licensing: Describes grounds for licences permitting otherwise-prohibited dealings with frozen assets, how to apply (including urgent cases), amending, refusing and complying with a licence, and reporting obligations under a licence.
• Designations and de-listing: Covers domestic designations, requests for designation by another country, when and how to request de-listing, and actions required upon notification of de-listing.
• Compliance and enforcement: Describes reporting a suspected breach, offences, and penalties for breaches of financial sanctions, and includes annexed forms (licence application, compliance reporting form, designation impact assessment form).

Because sanctions lists and regimes change frequently, the guidance directs readers to consult the up-to-date consolidated lists and current legislation rather than relying solely on this document. It notes that the Governor's functions were delegated to the Minister of Legal Affairs effective 25 September 2018 for matters including issuing/revoking licences and acting as reporting depository.

Key obligations

• Relevant institutions, businesses and professions must freeze funds and economic resources belonging to or controlled by designated/listed persons and must not make funds or economic resources available to them, directly or indirectly.
• Relevant institutions, businesses and professions must report to the FSIU where they know or suspect a customer is a designated person or that a breach of financial sanctions has occurred, in the manner specified in the guidance.
• Persons must keep records relating to actions taken in compliance with financial sanctions obligations.
• A licence must be obtained from the Minister of Legal Affairs (as delegate of the Governor) before dealing with frozen assets or engaging in otherwise-prohibited transactions with a designated person.
• Licence holders must comply with the terms of their licence and submit any reporting required under that licence.
• Persons must review consolidated sanctions lists and act promptly upon notification of a de-listing.

Applies to

relevant institutions, businesses and professions subject to Bermuda's financial sanctions regime, persons or entities holding or dealing with funds or economic resources of designated persons, licence applicants and licence holders under the International Sanctions Regulations, supervisory authorities responsible for regulating compliance with financial sanctions obligations

Deadlines

• 25 September 2018: Effective date of the International Sanctions (Delegation of Governor's Functions) Notice 2018 (BR 104/2018), delegating licensing, information-gathering and reporting-depository functions from the Governor to the Minister of Legal Affairs.