administrative fines

Who is caught

The Bermuda Monetary Authority (BMA) may impose civil penalties (administrative fines) under its sectoral Regulatory Acts and under the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008 (SEA). The Authority's Enforcement Guide and its Statements of Principles explain that these powers apply generally across Bermuda's regulated financial sector. The same frameworks apply to breaches of prudential (licensing) obligations and to breaches of AML/ATF and sanctions obligations.

• Banks and deposit companies: Institutions licensed under the Banks and Deposit Companies Act 1999 are subject to the Authority's civil penalty and disciplinary powers.
• Corporate service providers: Licensees under the Corporate Service Provider Business Act 2012 are within scope.
• Money service businesses: Licensees under the Money Service Business Act 2016 are within scope.
• Trust businesses: Licensees under the Trusts (Regulation of Trust Business) Act 2001 are within scope.
• Digital asset issuers: Undertakings authorised under the Digital Asset Issuance Act 2020 are subject to civil penalties and other disciplinary measures.
• Insurers and intermediaries: Entities and individuals registered under the Insurance Act 1978 have been subject to civil penalties, prohibition orders and registration cancellation, as recorded in the enforcement notices indexed here.
• Investment business licensees: Licensees under the Investment Business Act 2003 are within scope of the Authority's fining and licence-restriction powers.
• AML/ATF regulated persons: AML/ATF regulated financial institutions and non-licensed registered persons are subject to civil penalties under the SEA.
• Exchange control Filers: Any Filer (individual, company, partnership or similar entity) required to submit notifications under the Exchange Control Regulations 1973 is subject to civil penalties under Regulation 49B(5).

Sources: Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008 · Corporate Service Provider Business Act 2012 · Banks and Deposit Companies Act 1999 · Money Service Business Act 2016 · Digital Asset Issuance Act 2020 · Trusts (Regulation of Trust Business) Act 2001 · Enforcement Guide - Statement of Principles and Guidance on the Exercise of Enforcement Powers (September 2018) · Exchange Control Regulations Enforcement Guide 2023 · Enforcement Guide: Statement of Principles & Guidance on the Exercise of Enforcement Powers (September 2018) · Statement of Principles on the Use of Enforcement Powers · Notice Amendment of Statement of Principles (2012-12-13) · Statement of Principles on the Use of Enforcement Powers (2012-12-13)

Key duties

The enforcement guides and statements of principles do not themselves create new substantive obligations; they describe how the Authority uses powers the underlying Acts already grant. The recurring expectation is that regulated persons remain compliant at all times and remediate identified failings promptly. Where a fine is proposed, a defined notice procedure applies.

• Continuing compliance: Regulated entities are expected to comply with all their regulatory obligations at all times, including the Minimum Criteria for Registration or Licensing under their Regulatory Act.
• Prompt remediation: Where remedial action is agreed with supervisors, the entity is expected to implement it within a reasonable time; failure to remediate within the timeframe set has itself led to civil penalties in several cases.
• Cooperation: The degree of cooperation with the Authority during supervisory and enforcement processes is a factor in determining a civil penalty.
• Payment of penalties: Institutions must pay to the Authority any civil penalties levied on them, including AML/ATF penalties under the SEA.
• Annual fees: Entities regulated under the Insurance Act 1978 must pay Annual Business Fees on or by 31 March each year; non-receipt of an invoice is not an excuse for late payment.

Notice procedure and appeals

• Warning and decision notices: Most civil penalty actions require a warning notice giving the recipient an opportunity to make written representations, followed by a decision notice.
• Representation period: Under the Exchange Control regime a recipient of a warning notice must make representations within a specified period (not less than 28 days, unless extended). Under the AML/ATF regime, non-licensed persons facing cancellation may make representations under the section 13 procedure before a final decision.
• Appeal rights: Civil penalties, licence revocation, public censure, controller objections and prohibition orders carry a right of appeal to the relevant Tribunal, with prescribed time limits for lodging an appeal and grounds.

Sources: Investment Business Appeal Tribunal Regulations 2004 · Enforcement Guide - Statement of Principles and Guidance on the Exercise of Enforcement Powers (September 2018) · Exchange Control Regulations Enforcement Guide 2023 · Enforcement Guide: Statement of Principles & Guidance on the Exercise of Enforcement Powers (September 2018) · Statement of Principles on the Use of Enforcement Powers · Reminder: Annual Insurance Fees Due 31 March (2019-06-24) · Notice Amendment of Statement of Principles (2012-12-13) · Statement of Principles on the Use of Enforcement Powers (2012-12-13)

Exemptions and carve-outs

The instruments indexed here do not set out broad exemptions from the civil penalty regime itself. Rather than carve-outs, the enforcement frameworks build in factors that reduce or moderate a penalty.

• Ability to pay: Both the general Enforcement Guide and the Exchange Control Regulations Enforcement Guide expressly factor an entity's ability to pay into the final penalty amount.
• Mitigating factors: Cooperation, timely remediation, absence of financial benefit from the breach, and the size and quality of the book of business have been treated as mitigating in setting penalty amounts.
• Limited scope of ECR guide: The Exchange Control Regulations Enforcement Guide does not apply where an ECR provision addresses matters other than enforcement.

Separately, the underlying Acts contain licensing exemption orders and (for the Money Service Business Act 2016) confirmation that it does not apply to banks licensed under the Banks and Deposit Companies Act 1999, but these relate to whether an entity is regulated, not to relief from fines once a breach is established.

Sources: Money Service Business Act 2016 · Exchange Control Regulations Enforcement Guide 2023 · Enforcement Guide: Statement of Principles & Guidance on the Exercise of Enforcement Powers (September 2018)

Enforcement and penalties

The Authority's principal administrative-fine tool is the civil penalty, calculated under a structured framework in Annex A of the relevant enforcement guide. Penalty caps differ between prudential (Regulatory Act) breaches, AML/ATF (SEA) breaches, and exchange control breaches. Note that the caps stated in the older Statements of Principles differ from those in the September 2018 Enforcement Guide, which replaced the 2010 and 2012 statements.

Penalty caps

• Prudential penalties: Under the September 2018 Enforcement Guide, prudential civil penalties are capped at $500,000. The earlier Statements of Principles similarly describe civil penalties of up to $500,000 per breach of an obligation, or up to $5,000 per week for late statutory filings.
• AML/ATF (SEA) penalties: Under the September 2018 Enforcement Guide, SEA-related (AML/ATF) penalties are capped at $10 million. The earlier 2012 amended AML/ATF Statement of Principles referred to a maximum of $500,000.
• Exchange control: Civil penalties under the Exchange Control Regulations are subject to a $25,000 statutory maximum per breach, with discretionary ranges of up to $6,000 (minor), $6,000 to $15,000 (moderate), and $15,000 to $25,000 (major).
• Insurance late fees: Failure to pay Insurance Act annual business fees by 31 March incurs a late penalty of 10 percent of the fee due for every month or part month unpaid.

How penalties are set

The general Enforcement Guide applies a four-step, four-tier process (Minor, Moderate, Major, Critical) that assesses the seriousness of the breach, applies a discretionary range, considers ability to pay, and determines a final figure. Relevant factors include the nature of the breach, risk of loss, risk of financial crime, cooperation, reputational risk, and remediation. The AML/ATF Statement of Principles applies no fixed tariff and weighs factors such as deterrence, deliberateness, duration, the institution's size and resources, and action taken by other regulators.

Examples of penalties imposed

• Allianz Life Bermuda: $1,700,000 in civil penalties for AML/ATF, sanctions and Insurance Act breaches (consented).
• Sun Life Financial Investments: $1,500,000 in civil penalties plus a licence restriction for AML/ATF failures.
• Conyers Trust Company: $1,118,500 for AML/ATF and Trusts Act minimum criteria failures.
• Conyers Corporate Services: $981,000 for AML/ATF and Corporate Service Provider Business Act failures.
• Acadia Life Limited: $900,000 for AML/ATF Regulations failures.
• Meritus Trust Company: $600,000 for AML/ATF, Trusts Act and CSPB Act failures.
• Estera Services: $500,000 for failure to remediate AML/ATF deficiencies in time.
• Crown Global Life: $400,000 for AML/ATF failures.
• Colonial Pension Services: $200,000 for a licence-condition breach and client money regulation breaches.
• Acadia Life International: $100,000 for AML/ATF Regulations failures.
• Barrington Investments: $50,000 fine plus a licence restriction for Investment Business Act minimum criteria failures.
• Insurance broker fees and returns: Priosma incurred a $15,600 fee-related fine and a $51,500 civil penalty for failed statutory returns; U.S. Re incurred a $14,526 fine, both preceding cancellation of registration.

Other enforcement tools and appeals

Alongside civil penalties the Authority may issue directions, impose licence restrictions or conditions, issue public censures, make prohibition orders against directors and officers, object to controllers, seek injunctions, restrict or revoke licences, petition for winding up, and refer criminal conduct to the police. Certain enforcement actions, including civil penalties, licence revocation, public censure and prohibition orders, carry a right of appeal to the relevant Tribunal, and the Authority's policy is generally to publish enforcement actions.

Sources: Investment Business Appeal Tribunal Regulations 2004 · Enforcement Guide - Statement of Principles and Guidance on the Exercise of Enforcement Powers (September 2018) · Exchange Control Regulations Enforcement Guide 2023 · Enforcement Guide: Statement of Principles & Guidance on the Exercise of Enforcement Powers (September 2018) · Statement of Principles on the Use of Enforcement Powers · Notice - Cancellation of Registration - Priosma (2021-05-26) · Reminder: Annual Insurance Fees Due 31 March (2019-06-24) · Notice Amendment of Statement of Principles (2012-12-13) · Statement of Principles on the Use of Enforcement Powers (2012-12-13) · Civil Penalties - Meritus Trust Company Limited (2024-12-30) · Civil Penalties - Acadia Life International Limited (2023-08-24) · Civil Penalties - Acadia Life Limited (2023-08-24) · Civil Penalties - Conyers Trust Company (Bermuda) Limited (2022-05-02) · Civil Penalties - Conyers Corporate Services Limited (2022-05-02) · Civil Penalties - Allianz Life Bermuda Ltd. (2021-08-12) · Cancellation of Registration - Priosma Ltd. (2021-05-26) · Civil Penalties - Crown Global Life Insurance and Crown Global Life Insurance (Bermuda) Ltd (2020-12-31) · Civil Penalty - Estera Services (Bermuda) Limited (2019-06-14) · Civil Penalty Licence Restriction - Colonial Pension Services (2019-02-27) · Civil Penalty Licence Restriction - Sun Life Financial Investments (Bermuda) Ltd (2017-02-27) · Licence Restriction - Barrington Investments Limited (2016-08-29)