Bermuda

1. Does Bermuda have legislation making it a criminal offence to engage in money laundering and/or terrorist financing?

Yes.

The statutes are:

• Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008
• Financial Intelligence Agency Act 2007
• Anti-Terrorism (Financial and Other Measures) Act 2004
• Proceeds of Crime Act 1997 (POCA)
• The Criminal Justice (International Cooperation) (Bermuda) Act 1994

The relevant Regulations are:

• Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
• International Sanctions Regulations 2013
• Proceeds of Crime Appeal Tribunal Regulations 2009

The relevant Orders are:

• Anti-Terrorism (Financial and Other Measures) (Businesses in Regulated Sector) Order 2008
• Proceeds of Crime (Designated Countries and Territories) Order 1998

Reference should also be made to www.bermudalaws.bm for a comprehensive list of Bermuda’s legislation.

2. To whom does the legislation apply?

Generally, all persons and legal entities in Bermuda, as well as Bermuda incorporated firms operating in other jurisdictions, are subject to the Statutes and Orders listed above. The Regulations apply to businesses in the regulated sector and, in the case of failing to disclose a suspicion of money laundering, to any person who forms that suspicion based on information that came to him or her in the course of employment, trade or business.

3. What does the legislation prohibit?

The legislation is intended to prohibit persons from profiting from the commission of illegal acts.

4. How is money laundering defined? Does underlying criminal activity have to be proven?

Section 7 of the Proceeds of Crime Act 1997 (POCA) defines “money laundering” as an act which:

• constitutes an offence under Sections 43, 44 or 45;
• constitutes an attempt, conspiracy or incitement to commit a specified offence;
• constitutes aiding, abetting, counselling or procuring the commission of a specified offence;
• or would constitute a specified offence if it had been done in Bermuda;

Section 43 (POCA) states that a person commits an offence if he:

• conceals criminal property;
• disguises criminal property;
• converts criminal property;
• transfers criminal property;
• removes criminal property from Bermuda.

Section 44 (POCA) states that a person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects know or suspect facilitates (by whatever means) the acquisition, retention, use, or control of criminal property by or on behalf of another person.

Section 45 (POCA) states that a person commits an offence if he acquires criminal property; uses criminal property; has possession of criminal property.

5. What level of intent or knowledge is required to establish a violation?

The level of intent or knowledge required to establish a conviction varies from “reasonable grounds to suspect” to “actual knowledge” depending on the Statute, Order or Regulation in question.

6. What are the potential penalties for infringing the legislation?

Penalties for money laundering:

A person guilty of an offence under Section 43, 44 or 45 (POCA) shall be liable:

• on summary conviction, to imprisonment for five years or a fine of $50,000 or both;
• on conviction on indictment, to imprisonment for twenty years or an unlimited fine or both.

(It should be noted that other statues attract differing penalties.)

7. Does the legislation have extra-territorial reach?

Extra territorial reach will apply to Bermuda incorporated firms operating in other jurisdictions as well as to Bermuda licensed companies operating outside of Bermuda.

8. Are there additional anti-money laundering or counter terrorist financing regulations or obligations, such as registration or reporting obligations, for businesses or individuals that operate in particular sectors or undertake particular activities?

Yes – there are various requirements placed on businesses or individuals operating in the regulated sector. The Bermuda Monetary Authority publishes guidance notes in respect of the various types of business, such as banking, insurance, trusts, investment business, digital asset business, corporate service providers and trust service providers.

9. What are the potential penalties for failing to comply with these obligations?

Breach of or failure to comply with the guidance notes published by the BMA can result in regulatory sanction or censure, fines, revocation of operating license and even criminal prosecution in the more egregious cases. Typically, fines are the more common penalty applied to breaches. The BMA maintains a listing of its regulatory actions on its website.

10. Who are the relevant enforcement authorities in Bermuda and what are their contact details?