Notice Amendment of Statement of Principles (2012-12-13)

Summary

This notice announces and republishes the Bermuda Monetary Authority's amended Statement of Principles under the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008. The amendment expands the range of enforcement tools the Authority will use for AML/ATF breaches, moving beyond reliance on prudential supervisory powers to expressly cover the full suite of enforcement powers in the various regulatory Acts, alongside civil penalties and criminal sanctions.

• Enforcement approach: The Authority will normally seek remedial action from an institution before using formal enforcement powers, but will act immediately for serious breaches.
• Cancellation of registration: Non-licensed persons can have their registration cancelled for serious AML/ATF breaches, following a statutory notice-and-representations procedure under section 13 of the Act.
• Civil penalties: The Authority may levy civil penalties up to a maximum of $500,000, based on factors such as seriousness, deliberateness, duration, institution conduct, compliance history, and action taken by other regulators.
• Penalty amount factors: A detailed non-exhaustive list of factors (deterrence, seriousness, recklessness, size and resources of the institution, difficulty of detection, post-breach conduct, compliance history, and other regulators' actions) will be used to set penalty levels; no fixed tariff is applied.
• Relationship with prudential enforcement: Where a breach of the AML/ATF Act occurs, the Authority will consider its full range of enforcement options under both this Act and the relevant regulatory Acts, since AML/ATF compliance is now part of the Minimum Criteria assessed under those Acts.
• Publication of decisions: Decisions to impose penalties may be published under section 21 of the Act.
• Multi-jurisdiction cases: The Authority may coordinate enforcement action with overseas regulatory authorities on the same facts.
• Information-gathering and entry powers: The Authority retains formal powers to require information, documents and attendance (section 16), to enter and inspect business premises (section 17), and to obtain a warrant to enter premises (section 18).
• Application of penalty monies: Penalties collected from institutions are applied against the cost of AML/ATF supervision, with any surplus in a given year carried forward to offset future years' supervision costs.

The document itself is a notice republishing the amended Statement of Principles rather than imposing new standalone deadlines; it applies to AML/ATF regulated financial institutions and non-licensed persons subject to the 2008 Act.

Key obligations

• Institutions must pay to the Authority any civil penalties levied on them for breaches of the AML/ATF Regulations under section 24 of the Act.
• Non-licensed persons subject to a proposed cancellation of registration have the right to make representations to the Authority before a final decision, per the section 13 procedure.
• Institutions must, upon formal notice under section 16, provide information, produce documents, and have officers attend before the Authority to answer questions when required.
• Institutions must permit Authority officers to enter and inspect business premises under section 17 powers.

Applies to

AML/ATF regulated financial institutions, non-licensed persons