Exchange Control Regulations 1973

Summary

The Exchange Control Regulations 1973, made under the Exchange Control Act 1972, form Bermuda's foreign exchange control regime administered by the Controller of Foreign Exchange (a function situated within the BMA framework). They restrict dealings in gold and foreign currency, cross border and domestic payments, transfers of securities, import and export activity, and settlements, and require Controller permission for most cross border financial transactions unless an exemption applies.

Currency and gold controls: No person other than an authorized dealer may buy, sell, lend or borrow gold or foreign currency without the Controller's permission, and residents must surrender gold or foreign currency to an authorized dealer unless the Controller consents to retention.
Payments: Permission from the Controller is required for payments made in Bermuda to or for persons resident outside the Bermuda exchange control area, for payments made outside Bermuda by residents, and for compensation deals structured to avoid these controls.
Securities and beneficial ownership: Issue and transfer of securities, transfer of beneficial ownership in permit companies, and dealings in bearer certificates and coupons are regulated, and permit companies have a continuing duty to keep beneficial ownership information (10% or more ownership threshold) up to date.
Import and export: Restrictions apply to imports, exports and payments for exports without Controller permission, and persons must not delay the sale or importation of goods or the collection of certain debts.
Residency and corporate status: Detailed rules determine whether individuals, exempted companies, permit companies, partnerships and trustees are treated as resident or non-resident in Bermuda for purposes of the controls, with the Controller retaining discretion to direct residency status in specific cases.
Enforcement: The Regulations create civil penalty and offence provisions (including offences by bodies corporate) for contravention, with a defined appeals process for imposed penalties.

The Regulations apply broadly across Bermuda's exchange control area and affect authorized dealers and depositaries, exempted companies, permit companies, foreign and Bermudian controlled companies, exempted partnerships, trustees, hotels, passenger ships and any resident or non-resident individual or entity dealing in gold, foreign currency, securities, imports or exports.

Key obligations

Obtain the Controller of Foreign Exchange's permission before buying, selling, lending or borrowing gold or foreign currency other than through an authorized dealer
Surrender gold or foreign currency to an authorized dealer unless the Controller consents to its retention and use
Obtain the Controller's permission before making payments in Bermuda to, or crediting, persons resident outside the Bermuda exchange control area
Obtain the Controller's permission before making payments outside Bermuda to persons resident outside the Bermuda exchange control area
Obtain the Controller's permission before issuing or transferring securities, transferring beneficial ownership in permit companies, or dealing in bearer certificates or coupons
Permit companies must maintain and update beneficial ownership information for individuals who ultimately own 10% or more of shares, voting rights or interests
Obtain the Controller's permission before importing or exporting goods or making payments for exports outside permitted channels
Collect debts owed and not unduly delay the sale or importation of goods where required under the Regulations
Comply with directions of the Controller regarding blocked accounts, nominee holdings and registers of securities
Within 14 days of being notified of an order vesting gold or currency in the Crown, an aggrieved person may apply to the Supreme Court to determine their interest and compensation

Applies to

authorized dealers, authorized depositaries, exempted companies, permit companies, foreign controlled companies, Bermudian controlled companies, exempted partnerships, trustees of trusts or settlements, hotels licensed under the Hotels (Licensing and Control) Act 1969, passenger ships carrying passengers for reward, residents of Bermuda, non-residents of Bermuda

Deadlines

1 May 1973: Commencement date of the Exchange Control Regulations 1973
25 July 2018: Effective date on which the definitions of beneficial owner and individual were inserted into Regulation 2
within fourteen days of being notified of the making of an order under paragraph (6): Deadline for a person aggrieved by a vesting order over gold or foreign currency to apply to the Supreme Court to determine their interest, the legality of the acquisition, and compensation

Exchange Control Regulations 1973

Summary

Key obligations

Applies to

Deadlines

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