Bermuda Gears Up For On-Island Evaluation

Bermuda Gears Up For On-Island Evaluation

About Brian HoldippBrian Holdipp

Brian Holdipp is Counsel in the firm’s corporate practice group. His practice encompasses many areas of general corporate and commercial law, with specialist expertise in securities, joint ventures, corporate restructurings and cross-border financings. Mr. Holdipp also advises on partnerships.

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For a number of years, the international financial services sector has contributed the greatest amount to the Bermuda economy.  According to the National Economic Report published by the Ministry of Finance, international business provided $1.68 billion in total output or 27.3 per cent of total GDP in 2016. It is critical for Bermuda’s economic well-being then, that the Island remains in step with international standards set by supra-national regulatory authorities to protect the jurisdiction’s financial system from abuse.

One such authority is The Financial Action Task Force (FATF).  The FATF is an intergovernmental body established to set standards and promote effective implementation of anti-money laundering (AML) measures and methods designed to combat terrorist financing (CTF).  In September and October 2018, its regional organisation, the Caribbean Financial Action Task Force (CFATF) will be on Island to conduct a mutual evaluation review of the effectiveness of Bermuda’s AML/CTF regime.  While there has been significant engagement with the CFATF assessment team earlier in the year in the form of written submissions, the on-site evaluation will call for the participation of and individual representation from various sectors across the economy, including, for example, trust service providers, corporate service providers and the legal, accounting and real estate sectors.  During the visit, the assessment team will also speak to government authorities at policy and operational levels, including regulators and supervisors of financial institutions and designated non-financial businesses and professions, law enforcement and the financial intelligence unit.

The mutual evaluation process is a peer review process and, as such, the assessment team is generally comprised of a small number of experts with a range of experience from the governments of the CFATF.   The assessment team will include persons with a range of experience covering legal, law enforcement and financial intelligence unit issues, financial supervision and regulation and international cooperation.  During the assessment, they will look for evidence that demonstrates how well Bermuda’s AML/CTF regime is working in the context of the risks the country is exposed to.

The conclusions from the on-site visit will be included in the mutual evaluation report which, before publication by the FATF, must first be discussed and adopted by the CFATF plenary meeting scheduled to be held in May 2019.

Confirmation in that report of Bermuda’s compliance with global AML/CTF standards is the goal. This is crucial to reinforcing the Island’s status as a highly-regarded jurisdiction for international business.