Good morning.
It is with great pleasure that I announce today that an international standards setting body have confirmed that Bermuda is one of the global leaders in the fight against money laundering, the financing of terrorism and proliferation. This is an excellent result and a major accomplishment for Bermuda.
Bermuda’s assessment was conducted by a team of experts from the Caribbean Financial Action Task Force and, throughout the process, was subject to review and oversight by persons and entities within the Financial Action Task Force (FATF) global network.
The mutual evaluation report (MER) of Bermuda’s systems and framework to combat money laundering and the financing of terrorism and proliferation, which is today being published by the Caribbean Financial Action Task Force, highlights the outstanding work that has been done to develop and implement an effective framework that is, to a large extent, compliant with the international standards, namely the Financial Action Task Force (FATF) 40 Recommendations and associated Methodology.
Of the more than 75 mutual evaluation reports published to date by FATF, Bermuda’s compliance with the Technical compliance requirements is the highest of any jurisdiction, with 39 of the 40 Recommendations rated as Compliant or Largely Compliant.
Further, in relation to the overall level of effectiveness, Bermuda ranks in the top six of all MERs published to date. And, Bermuda is only the second jurisdiction thus far to be assessed as having a high level of effectiveness in relation to its risk assessment and domestic coordination mechanisms.
Significant work was carried out to achieve these results and as I said earlier – our performance is excellent and this is a major accomplishment.
Let me provide a little background on the process.
The review commenced in March 2018 with Bermuda’s first submission in relation to its Technical Compliance. Further submissions were made during the subsequent six months and were followed by an on-site review by the assessment team.
The on-site visit lasted for a period of two weeks and included interviews with officials from all relevant competent and supervisory authorities, including the Bermuda Police Service, Customs, the Financial Intelligence Agency, the Attorney General’s Chambers, the Department of Public Prosecutions, the Bermuda Casino and Gaming Commission, the Bermuda Monetary Authority, the Registrar of Companies, the Registrar General, the Barristers and Accountants AML/ATF Board, the Office of the National Anti-Money Laundering Committee and the Ministries of Finance and Legal Affairs.
In addition, the assessment team had over 30 meetings with persons from relevant industry bodies and a diverse group of entities in the financial and non-financial sectors. The report, which was approved by the CFATF plenary in November 2019, was submitted to FATF who oversaw the post-plenary global quality and consistency review.
Consistent with its legislative mandate, the National Anti-Money Laundering Committee played a key role in the development and implementation of the framework and in the coordination of the various initiatives that contributed to the successful outcome. NAMLC was comprehensively and effectively supported by the work done by the Office of NAMLC, which is the dedicated team that was established following Bermuda’s last mutual evaluation in 2007, to assist NAMLC in its duties.
A Cabinet AML Committee, led by the Premier and consisting of all Ministers responsible for oversight of NAMLC agencies, was also established during the review period, to ensure that the requirements were appropriately addressed and that the required preparations for the review progressed on a timely basis and in an effective manner.
The multi-prong approach taken in this initiative further included a Steering Committee with three senior Ministry of Finance officials. Industry also played a key role in the development and implementation of the regime.
On behalf of the Bermuda Government, I would like to express my deepest appreciation for all those who have been involved in ensuring that Bermuda appropriately developed and implemented a strong and robust framework, which allowed for such a positive assessment by the review team.
To provide further detail on the level of Bermuda’s achievement in relation to the effectiveness of its regime, I would note that, in the eleven areas that were evaluated for effectiveness, Bermuda received one rating of High effectiveness and six ratings of substantial effectiveness.
These strong ratings, which place Bermuda sixth in the rankings of the more than 75 MERs published globally under the updated FATF methodology, relate to the following activities:
a) assessment and understanding of money laundering and terrorist financing risk and domestic coordination of activities to combat these nefarious crimes (HIGH)
b) international cooperation activities to provide intelligence and evidence to facilitate action against criminals (SUBSTANTIAL);
c) appropriate supervision and regulation of relevant entities to ensure compliance with their required obligations (SUBSTANTIAL);
d) administration and oversight of legal persons and arrangements to prevent their misuse and to ensure that required information on beneficial owners is available (SUBSTANTIAL).
e) use of financial intelligence and other information to facilitate investigation of criminal activities (SUBSTANTIAL):
f) investigations, prosecutions and sanctions (as appropriate) in relation to terrorist financing (SUBSTANTIAL): and
g) the implementation of targeted financial sanctions for terrorist financing (SUBSTANTIAL).
The Bermuda Government has on many occasions highlighted its commitment to a high level of compliance with appropriate global standards and stressed its determination to take the required steps to combat money laundering and the financing of terrorism and proliferation.
As our results indicate, we have followed through on that commitment and we have established appropriate legislative and operational frameworks and then done considerable work to ensure that the regime is robust and effective.
However, we recognize that, given the global community in which we live, there will always be more that can be done. In that regard, we have already begun the work to address some of the recommendations made by the team.
Actions taken to date include:
- Focused work to imbed the new requirements in relation to beneficial ownership;
- Implementation of the framework for licensing and supervision of relevant private trust companies;
- Implementation of a regime to ensure appropriate oversight of privately funded charities;
And
- All supervisors of more recently regulated sectors have actively continued their work to strengthen their oversight of such sectors, using a risk-based approach and to ensure that entities are appropriately implementing the requirements.
In addition, consistent with the national policy and Bermuda’s understanding of the importance of regularly updating our evaluation of our money laundering/terrorist financing risks, Bermuda has already commenced work on its next TF National Risk Assessment.
As part of this work, TF focused training was provided to all relevant competent authorities and representatives from the private sector.
In closing, I must reiterate my gratitude to the Bermuda team for their strong level of commitment and professionalism and the tireless efforts to ensure that this evaluation was a strong representation of the framework that is in place in Bermuda.
Specifically, I wish to thank Mrs. Cheryl Ann Lister, the Chair of NAMLC and Ms. Paula Tyndale, the National Coordinator together with their teams for their exceptional leadership, and the technical and strategic advice provided during this period. You set a high bar with this one.
We are also appreciative of the leadership of the Premier and the continual support and dedicated commitment displayed by my colleagues in Cabinet, the Legislature and our partners in industry, in relation to these matters. The significant achievements highlighted in this report further reinforces Bermuda’s accomplishments in other areas, including the National Association of Insurance Commissioners’ recognition of Bermuda’s insurance regulatory framework and the maintenance of our good sovereign debt rating, all of which are consistent with Bermuda’s reputation as a quality international financial centre.
Notwithstanding the excellent results detailed in this report, we will continue to play our part in this important global fight against these nefarious crimes and take the actions necessary to continue to achieve the highest levels of compliance and effectiveness.
In the fight against money laundering, the financing of terrorism and proliferation, the Mutual Evaluation Report confirms that Bermuda is one of the global leaders. It confirms that we understand our risks, we respond appropriately and we manage our risk accordingly. The results of this report confirm that we know what we are doing and we do it well.
Thank you.
Background notes:
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is, therefore, a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
The FATF has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction. They form the basis for a coordinated response to these threats to the integrity of the financial system and help ensure a level playing field. First issued in 1990, the FATF Recommendations were revised in 1996, 2001, 2003 and most recently in 2012 to ensure that they remain up to date and relevant, and they are intended to be of universal application.
The Caribbean Financial Action Task Force or CFATF is one of several regional bodies associated with the FATF.
The full report can be found here: www.cfatf-gafic.org
