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An update on the Anti-Money Laundering/Anti-Terrorist Financing supervision of the high value dealers sectors.

Friday, November 25, 2016
Trevor Moniz

Ministerial Statement by the Minister of Legal Affairs, The Hon. Trevor G. Moniz JP MP

Mr. Speaker, I wish to update this Honourable House on the progress that has been made by the Financial Intelligence Agency (FIA) in particular, and the National Anti-Money Laundering Committee in general, in updating Bermuda's Anti-Money Laundering/Anti-Terrorist Financing (AML/ATF) framework, to include within its scope the supervision of dealers of high value goods. This effort is part of Bermuda's continuing commitment to enhance

Bermuda's compliance with the requirements set out in the international standards established by the Financial Action Task Force (FATF).

Mr. Speaker, In July of this year the legislature enacted amendments to Bermuda's AML/ATF legislation, amongst which were provisions to bring in scope dealers in high value goods; and empowering the FIA to undertake the supervision of businesses which make up that group. These legislative provisions will come into effect on December 1, 2016. Dealers in High Value Goods are defined in the legislation to include:

  • Jewellery dealers;
  • Car, boat and motorcycle dealers;
  • Precious metal and stone dealers;
  • Antique dealers; and
  • Auctioneers.

Mr. Speaker, The supervisory framework for these sectors will be unique.  Businesses will have the opportunity to organise their operations in a way that will obviate the need for them to be registered and be subject to supervision by the FIA. This is because the supervisory regime will only be focussed on those businesses that wish to be able to accept cash payments totalling $7,500 or more, or the equivalent in any other currency, for a single transaction or series of related transactions.

Therefore, Mr. Speaker, businesses that make a commitment to exclude from their operations these high risk cash transactions at or above that threshold, will be excluded from the registration requirements and will only occasionally be required to demonstrate that they continue to adhere to that commitment. For those businesses that do wish to undertake cash transactions above the threshold, they will be required to register with the FIA and therefore will be subject to the applicable requirements in the AML/ATF laws.  These  specify the preventive controls that must be implemented by these entities in order to reduce their risk of being abused for money laundering and terrorist financing.

Mr. Speaker, I would therefore like to advise that since the amendments were enacted, the FIA has carried out a number of administrative and outreach activities to prepare themselves and the relevant sectors for the commencement of the supervisory framework. To that end they prepared draft Guidance Notes, which they circulated to the sectors on August 26, 2016 for consultation. The consultation period lasted until September 30th.  During that time the FIA also conducted training sessions with the dealers in high value goods, as well as had outreach with the banking sector to update them on this development.

Mr. Speaker, Feedback provided to the FIA by industry and by the membership of NAMLC, was taken into account in updating the draft Guidance Notes. The final draft was submitted to me for my review and approval. I have confirmed in writing my approval of these Guidance Notes and have requested that they be published in the Official Gazette and an electronic copy be made available on the website of the Financial Intelligence Agency.

Mr. Speaker, Although the provisions of the legislation will commence on December 1, 2016, the Financial Intelligence Agency will, with my approval, commence registration on January 2, 2017. Going forward, the FIA will continue their outreach and training sessions with these sectors to enhance their understanding of the regime and to empower them with the information necessary to facilitate compliance with the requirements.

Mr. Speaker, I have provided a copy of the Guidance Notes to the Clerk for the benefit of the Honourable Members and the public.

With that Mr. Speaker, I thank you for your indulgence.