Notice - Enforcement Action - Civil Penalties - Meritus Trust Company Limited (2024-12-30)

Summary

This notice announces that the Bermuda Monetary Authority (BMA) has imposed civil penalties totalling $600,000 on Meritus Trust Company Limited, a locally licensed trust and corporate service provider, for failures to comply with anti-money laundering and anti-terrorist financing obligations and with minimum licensing criteria under the Trusts Act and CSPB Act. The breaches were identified during virtual on-site inspections in July 2022 and have since been fully remediated to the Authority's satisfaction, with the on-site matter now closed.

• AML/ATF Regulations breaches: Failure to recognise outsourcing implications of using an independent third party for audit functions, insufficient risk rating of products and services, inappropriate customer risk assessments, inadequate documentation of policies and procedures, missing CDD information at inspections, insufficient ongoing monitoring evidence, overreliance on manual PEP and sanctions screening processes, insufficient documentation of third party reliance for CDD, and inadequately documented training.
• Licensing criteria breaches: Failure to conduct business in a manner fully compliant with prudent business requirements and to implement adequate corporate governance policies and control systems consistent with the Company's risk profile, contrary to minimum criteria under the Trusts Act and CSPB Act.
• Remediation outcome: The Authority required remediation by 31 July 2023 (as extended where approved); the Company complied within the required timeframe and the Authority has confirmed closure of the on-site inspection.
• Mitigating factors considered: BMA's culture of compliance commitment, the largely procedural/documentation nature of breaches, low risk of client loss, cooperative and timely remediation, and implementation of measures to prevent recurrence.

This is a historical enforcement notice describing action already concluded; it does not itself impose new ongoing obligations on other licensees beyond serving as a compliance reminder about AML/ATF and governance standards expected of trust and corporate service providers.

Applies to

trust companies, corporate service providers, AML/ATF regulated financial institutions

Deadlines

• 31 July 2023: Deadline set by the Authority for Meritus Trust Company Limited to remediate the identified AML/ATF and licensing breaches (or as extended with approval).