30/07/18

BERMUDA: Anti-Money Laundering Laws Passed.

(The Royal Gazette) -- Minister of Health Kim Wilson saw through a sweep of amendments that aim to address matters “pertinent to Bermuda’s compliance with international standards”.

Bermuda’s standards, set by the Financial Action Task Force will come under scrutiny in an upcoming national audit.

MPs voted on nine changes to laws designed to protect the island from money laundering and terrorist funding activities on Friday.

Law changes are proposed on proceeds of crime, charities, banks and the accountancy profession, as well as the Bermuda Monetary Authority.

Ms Wilson said assessment of Bermuda’s anti-money laundering, antiterrorist financing regime has started and a team drawn from peer jurisdictions and led by the Caribbean Financial Action Task Force will visit the island for two weeks from September 24 to carry out the on-site portion.

Collectively, the bills amend an “extensive list of laws”, demonstrating “how entrenched the AML/ATF framework is within our wider body of regulatory laws”.

Ms Wilson said: “This reflects Bermuda’s commitment to having a cohesive programme for combating money laundering and terrorist financing, which incorporates all relevant stakeholders.

“These amendments will continue to strengthen the respective powers and responsibilities of competent authorities and clarify the obligations of other stakeholders within the regime.”

She continued: “As part of our ongoing efforts to enhance Bermuda’s compliance with FATF standards on combating money laundering and terrorist financing, these bills seek to achieve a number of important objectives, chief among which is to maintain Bermuda’s reputation as a premier international financial centre with a robust and effective regulatory framework.”

Yet Opposition deputy leader Leah Scott said: “The legislation that’s being introduced today is just a continuation of regulations and impositions being imposed on us by jurisdictions that don’t follow the same rules.

“We have been besieged for the past three years with all kinds of things that we are required to do as a jurisdiction, mainly because the US and the UK see us as jurisdictions where people choose to profit-shift.”

She explained that means a tax avoidance strategy that exploits “gaps and mismatches” in rules to artificially shift taxes to low or no tax jurisdictions.

Ms Scott added: “Some of this legislation will achieve, I guess, the goals that it set out to do. I think that I’d like to see a summary of how a driver’s licence and a utility bill has stopped money-laundering and terrorist financing. I’m not sure how effective that is.”

She went on to warn: “If we continue to comply with all of the things that they’re imposing on us, businesses are going to leave, there’s not going to be any reason for them to stay in this jurisdiction and we wonder whether the goal, from the EU and the US, is to put the jurisdictions out of business.

“They have no concern for the people of this country, they have no concern for the businesses and the continued impositions and the requirement to reveal and be transparent is going to cost the jurisdiction in terms of its business model.”

And Ms Scott told members: “We have recently imposed legislation that requires us to provide a register of directors and officers to the Registrar of Companies and that is now a public document.

“I had a client call me last week who has been stalked by someone who found his name on the register of directors and officers of Bermuda, his home address was listed and he has now had to have protection because he had somebody stalking him.

“So this is the result of the things that are required by us to be transparent but those jurisdictions are not willing to carry out the same transparency.

“I have to applaud the Premier in terms of his efforts to keep the EU at bay with all of the things that they have been trying to impose upon us and I hope that as a jurisdiction that we can continue to try to withstand all of the pressure for as long as we can.”

Ms Scott posed questions about the status of digital assets whether they are to be regulated by a financial institution by the AML/ATF regime.

Ms Wilson said that the legislation was “evolving” and it would more than likely need to be revisited.

“This legislation has moved very quickly — new technologies and financial instruments and so forth are moving very, very quickly so it is likely that this legislation will have to be amended as new technologies come on board. Right now, because the assessors have identified certain areas that were absent within our regime upon their review of our technical compliance submissions, we are trying to close that gap.”

Ms Scott also took issue with the fact that private charities would be subject to the regime saying that was private money. Ms Wilson said the assessors identified private charities as a risk area and that Bermuda’s reputation was “paramount”.

The $10m maximum fine for non-compliance, Ms Wilson said, was meant to be “dissuasive” in response to a question by Ms Scott as to whether there was any safety net for businesses that would be bankrupted by such a penalty. Any fines or disciplinary measures would have to be “appropriate and proportionate” according to the act.