On February 13, 2023, the Bermuda Monetary Authority ("BMA") released an updated version of its Anti-Money Laundering and Anti-Terrorist Financing ("AML/ATF") Guidance Notes (2023 GN), which provide financial institutions with guidance on how to comply with regulatory requirements. The 2023 GN replace and supersede earlier guidance notes. Additionally, the BMA updated several sets of sector-specific guidance notes. The 2023 GN reflect a continued focus on strengthening AML/ATF compliance and mitigating financial crime risks.
What do you need to know?
Prescriptive language: One of the key changes in the 2023 GN is the more prescriptive language, which provides regulated financial institutions (“RFIs”) with more specific guidance on how to comply with regulatory requirements. The 2023 GN also clearly define the division of responsibilities of various regulatory bodies in Bermuda and add a list of the BMA's enforcement powers.
Qualification of independent auditor: The 2023 GN provide more emphasis on the importance of adequate qualification of the independent auditor stating that "expertise and proficiency may be evidenced by continuing training, and professional education focused on AML/ATF, including internationally recognized certifications".
Customer due diligence: Clarification regarding identification and verification. The 2023 GN provide clarification regarding information that must be identified and verified for all customers (i.e. proof of address). The 2023 GN also include specific guidance on the acceptable documents for verification of identity including electronic verification.
Clarification on the application of simplified due diligence (SDD): RFIs now have more specific guidance on when SDD can be applied.
Reliance requirements: Certain changes were made in relation to the wording around reliance requirements. Specifically, the 2023 GN make it very clear that there can be no 'chain' or 'passing on' of reliance involving more than two persons or institutions.
Sanctions risk assessment: The 2023 GN provide more details on how to conduct and document the RFI's exposure to Sanctions related risks.
If you have any questions and/or would like additional information, do not hesitate to contact us.
