FAQ's - Assessment of Bermuda's National Money Laundering and Terrorist Financing Risk Report (2018-05-17)

Summary

This is an informational FAQ document from the BMA explaining Bermuda's 2017 National Risk Assessment (NRA) of money laundering (ML) and terrorist financing (TF) risk. It describes the BMA's role in preparing the NRA, summarizes key findings, and reminds regulated institutions of their existing AML/ATF obligations. It does not itself create new rules but reinforces expectations under the existing risk-based AML/ATF framework.

• Overall ML threat rating: Raised to medium-high, up from medium in the 2013 assessment, reflecting improved analysis rather than a change in underlying risk.
• Highest inherent ML risk sectors: Banking, securities, Trust Service Providers (TSPs), and Corporate Service Providers (CSPs).
• Medium-high inherent ML risk sectors: Long-Term insurance (direct) and Money Services Businesses (MSBs).
• Lower risk: Bermuda Stock Exchange (BSX) rated medium-low ML inherent risk; TF vulnerability generally rated low or medium-low across most sectors, with no evidence of actual terrorism or TF activity in Bermuda.
• Digital Asset Business: BMA notes the proposed Digital Asset Business regime, following an April 2018 Consultation Paper and legislation read into Parliament on 11 May 2018, is relevant to the upcoming CFATF Mutual Evaluation Review of Bermuda's AML/ATF framework for its fintech sector.

The FAQ reiterates that financial institutions and designated non-financial businesses and persons, including non-profits, are expected to understand their ML/TF risk exposure and apply AML/ATF policies and procedures accordingly, using the NRA findings as a foundation for their risk-based frameworks.

Key obligations

• Financial institutions and designated non-financial businesses and persons (including non-profits) must understand the nature and level of ML and TF risks they face.
• Financial institutions and designated non-financial businesses and persons must apply AML/ATF policies and procedures to mitigate and monitor these risks.

Applies to

banks, securities firms, Trust Service Providers (TSPs), Corporate Service Providers (CSPs), insurance companies (Long-Term direct), Money Services Businesses (MSBs), Bermuda Stock Exchange (BSX), designated non-financial businesses and persons, non-profit organizations, digital asset businesses