Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



1





BR 77/2008

PROCEEDS OF CRIME ACT 1997

1997 : 34

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-

TERRORIST FINANCING) REGULATIONS 2008

ARRANGEMENT OF REGULATIONS

PART 1

PRELIMINARY

1 Citation and commencement

2 Interpretation

3 Meaning of beneficial owner

4 Application of Regulations

PART 2

CUSTOMER DUE DILIGENCE

5 Meaning of customer due

diligence measures

6 Application of customer due

diligence measures

7 Ongoing monitoring

8 Timing of verification

9 Requirement to cease

transactions, etc.

10 Simplified due diligence

11 Enhanced customer due

diligence

12 Branches and subsidiaries

13 Shell banks, anonymous

accounts, etc.

14 Reliance on third parties

PART 3

RECORD-KEEPING, SYSTEMS,

TRAINING, ETC.

15 Record-keeping

16 Systems

17 Internal reporting procedures

18 Training, etc.

19 Offences

20 BR 9/1998 revoked

SCHEDULE





In exercise of the powers conferred upon the Minister responsible

for Justice by section 49(3) of the Proceeds of Crime Act 1997 and

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



2



section 12A of the Anti-Terrorism (Financial and Other Measures) Act

2004, the following Regulations are made:

PART 1

PRELIMINARY

Citation and commencement

1 These Regulations may be cited as the Proceeds of Crime (Anti-

Money Laundering and Anti-Terrorist Financing) Regulations 2008 and

shall come into operation on such day as the Minister may appoint by

notice published in the Gazette and the Minister may appoint different

days for different provisions.

Interpretation

2 (1) In these Regulations

“appointed stock exchange” means a stock exchange appointed

by the Minister of Finance under section 2 (9) of the

Companies Act 1981;

“banking institution” means a person carrying on deposit-taking

business within the meaning of section 4 of the Banks and

Deposit Companies Act 1999;

“beneficial owner” has the meaning given in regulation 3;

“business relationship” means a business, professional or

commercial relationship between a relevant person and a

customer, which is expected by the relevant person when

contact is first made between them to have an element of

duration;

“customer due diligence measures” has the meaning given by

regulation 5;

“financial institution” has the meaning given in paragraph (2);

“firm” means any entity, whether or not a legal person, that is

not an individual and includes a body corporate and a

partnership or other unincorporated association;

“independent professional” means a professional legal adviser or

accountant being a firm or sole practitioner in independent

practice who by way of business provides legal or

accountancy services to other persons when participating in

financial or real property transactions concerning

(a) buying and selling real property;

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



3



(b) managing of client monies, securities and other assets;

(c) management of bank, savings or securities accounts;

(d) organisation of contributions for the creation, operation

or management of companies;

(e) creation, operation or management of legal persons or

arrangements, and buying and selling business entities

and, for this purpose, a person participates in a transaction by

assisting in the planning or execution of the transaction or

otherwise acting for or on behalf of a client in the transaction;

“money laundering” has the meaning given in section 7(1) of the

Proceeds of Crime Act 1997;

“occasional transaction” means a transaction (carried out other

than as part of a business relationship) amounting to

$15,000 or more, whether the transaction is carried out in a

single operation or several operations which appear to be

linked;

“professional accountant” has the meaning given in section 42A

of the Proceeds of Crime Act 1997;

“professional legal adviser” has the meaning given in section 42A

of the Proceeds of Crime Act 1997;

“relevant person” means the person to whom in accordance with

regulation 4, these Regulations apply;

“supervisory authority” means the Bermuda Monetary Authority

in relation to relevant persons that are financial institutions;

or a professional body designated by the Minister under any

enactment in relation to relevant persons regulated by it.

“terrorist financing” means an offence under section 5, 6, 7 or 8

of the Anti-Terrorism (Financial and Other Measures) Act

2004;

(2) “financial institution” means a person who

(a) carries on deposit-taking business within the meaning of

section 4 of the Banks and Deposit Companies Act 1999;

(b) carries on investment business within the meaning of

section 3 of the Investment Business Act 2003;

(c) is an insurer (and not a reinsurer) registered under

section 4 of the Insurance Act 1978 who carries on long

term business falling within paragraph (a) or (c) of the

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



4



definition of “long-term business” in section 1(1) of the

Insurance Act 1978;

(d) is an insurance manager or broker registered under

section 10 of the Insurance Act 1978 in so far as he acts

as a manager or broker in connection with long term

business (other than reinsurance business) falling within

paragraph (a) or (c) of the definition of “long-term

business” in section 1(1) of the Insurance Act 1978;

(e) carries on the business of a fund administrator within

the meaning of section 2(2) of the Investment Funds Act

2006;

(f) carries on money service business within the meaning of

section 20AA of the Bermuda Monetary Authority Act

1969;

(g) carries on trust business within the meaning of section

9(3) of the Trusts (Regulation of Trust Business) Act

2001 and is not otherwise exempted by or under

paragraph 3 of the Trusts (Regulation of Trust Business)

Exemption Order 2002; or

(h) is the operator of an investment fund within the

meaning of section 2 of the Investment Funds Act 2006;

Meaning of beneficial owner

3 (1) In the case of a body corporate, “beneficial owner” means

any individual who—

(a) as respects any body other than a company whose

securities are listed on an appointed stock exchange,

ultimately owns or controls (whether through direct or

indirect ownership or control, including through bearer

share holdings) more than 25% of the shares or voting

rights in the body; or

(b) as respects any body corporate, otherwise exercises

control over the management of the body.

(2) In the case of a partnership, “beneficial owner” means any

individual who—

(a) ultimately is entitled to or controls (whether the

entitlement or control is direct or indirect) more than a

25% share of the capital or profits of the partnership or

more than 25% of the voting rights in the partnership; or

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



5



(b) otherwise exercises control over the management of the

partnership.

(3) In the case of a trust, “beneficial owner” means—

(a) any individual who is entitled to a specified interest in at

least 25% of the capital of the trust property;

(b) as respects any trust other than one which is set up or

operates entirely for the benefit of individuals falling

within sub-paragraph (a), the class of persons in whose

main interest the trust is set up or operates;

(c) any individual who has control over the trust.

(4) In paragraph (3)—

“specified interest” means a vested interest which is—

(a) in possession or in remainder or reversion; and

(b) defeasible or indefeasible;

“control” means a power (whether exercisable alone, jointly

with another person or with the consent of another

person) under the trust instrument or by law to—

(a) dispose of, advance, lend, invest, pay or apply trust

property;

(b) vary the trust;

(c) add or remove a person as a beneficiary or to or

from a class of beneficiaries;

(d) appoint or remove trustees;

(e) direct, withhold consent to or veto the exercise of a

power such as is mentioned in subparagraph (a),

(b), (c) or (d).

(5) For the purposes of paragraph (3)—

(a) where an individual is the beneficial owner of a body

corporate which is entitled to a specified interest in the

capital of the trust property or which has control over

the trust, the individual is to be regarded as entitled to

the interest or having control over the trust; and

(b) an individual does not have control solely as a result of—

(i) his consent being required in accordance with

section 24(1) (c) of the Trustee Act 1975 (power

of advancement); or

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



6



(ii) the power exercisable collectively at common law

to vary or extinguish a trust where the

beneficiaries under the trust are of full age and

capacity and (taken together) absolutely entitled

to the property subject to the trust.

(6) In the case of a legal entity or legal arrangement which does

not fall within paragraph (1), (2) or (3), “beneficial owner” means—

(a) where the individuals who benefit from the entity or

arrangement have been determined, any individual who

benefits from at least 25% of the property of the entity or

arrangement;

(b) where the individuals who benefit from the entity or

arrangement have yet to be determined, the class of

persons in whose main interest the entity or

arrangement is set up or operates;

(c) any individual who exercises control over at least 25% of

the property of the entity or arrangement.

(7) For the purposes of paragraph (6), where an individual is

the beneficial owner of a body corporate which benefits from or exercises

control over the property of the entity or arrangement, the individual is to

be regarded as benefiting from or exercising control over the property of

the entity or arrangement.

(8) In the case of an estate of a deceased person in the course

of administration, “beneficial owner” means the executor, original or by

representation, or administrator for the time being of a deceased person.

(9) In any other case, “beneficial owner” means the individual

who ultimately owns or controls the customer or on whose behalf a

transaction is being conducted.

(10) In this regulation—

“arrangement”, “entity” and “trust” means an arrangement,

entity or trust which administers and distributes funds.

Application of Regulations

4 These Regulations apply to the following persons acting in the

course of business carried on by them in or from Bermuda

(a) financial institutions;

(b) independent professionals.

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



7



PART 2

CUSTOMER DUE DILIGENCE

Meaning of customer due diligence measures

5 "customer due diligence measures” means

(a) identifying the customer and verifying the customer's

identity on the basis of documents, data or information

obtained from a reliable and independent source;

(b) identifying, where there is a beneficial owner who is not

the customer, the beneficial owner and taking adequate

measures, on a risk-sensitive basis, to verify his identity

so that the relevant person is satisfied that he knows

who the beneficial owner is, including, in the case of a

legal person, trust or similar legal arrangement,

measures to understand the ownership and control

structure of the person, trust or arrangement; and

(c) obtaining information on the purpose and intended

nature of the business relationship.

Application of customer due diligence measures

6 (1) Subject to regulations 7, 10, 11, 13(4) and 14, a relevant

person must apply customer due diligence measures when he

(a) establishes a business relationship;

(b) carries out an occasional transaction;

(c) suspects money laundering or terrorist financing; or

(d) doubts the veracity or adequacy of documents, data or

information previously obtained for the purpose of

identification or verification.

(2) A relevant person must apply customer due diligence

measures at appropriate times to existing customers on a risk-sensitive

basis.

(3) A relevant person must—

(a) determine the extent of customer due diligence measures

on a risk-sensitive basis depending on the type of

customer, business relationship, product or transaction;

and

(b) be able to demonstrate to its supervisory authority that

the extent of customer due diligence measures is

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



8



appropriate in view of the risks of money laundering and

terrorist financing.

(4) Where—

(a) a relevant person is required to apply customer due

diligence measures in the case of a trust, legal entity

(other than a body corporate) or a legal arrangement

(other than a trust); and

(b) the class of persons in whose main interest the trust,

entity or arrangement is set up or operates is identified

as a beneficial owner,

the relevant person is not required to identify all the members of

the class.

Ongoing monitoring

7 (1) A relevant person must conduct ongoing monitoring of a

business relationship.

(2) “Ongoing monitoring” of a business relationship means—

(a) scrutiny of transactions undertaken throughout the

course of the relationship (including, where necessary,

the source of funds) to ensure that the transactions are

consistent with the relevant person‟s knowledge of the

customer, his business and risk profile; and

(b) so far as practicable keeping the documents, data or

information obtained for the purpose of applying

customer due diligence measures up-to-date.

(3) Regulation 6(3) applies to the duty to conduct ongoing

monitoring under paragraph (1) as it applies to customer due diligence

measures.

Timing of verification

8 (1) This regulation applies in respect of the duty under

regulations 6(1)(a) and (b) to apply the customer due diligence measures

referred to in regulations 5(a) and (b).

(2) Subject to paragraphs (3) to (5), a relevant person must

verify the identity of the customer (and any beneficial owner) before the

establishment of a business relationship or the carrying out of an

occasional transaction.

(3) Such verification may be completed during the

establishment of a business relationship if—

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



9



(a) this is necessary not to interrupt the normal conduct of

business; and

(b) there is little risk of money laundering or terrorist

financing occurring, provided that the verification is

completed as soon as practicable after contact is first

established.

(4) The verification of the identity of the beneficiary under a life

insurance policy may take place after the business relationship has been

established provided that it takes place at or before the time of payout or

at or before the time the beneficiary exercises a right vested under the

policy.

(5) The verification of the identity of a bank account holder may

take place after the bank account has been opened provided that there

are adequate safeguards in place to ensure that

(a) the account is not closed; and

(b) transactions are not carried out by or on behalf of the

account holder (including any payment from the account

to the account holder), before verification has been

completed.

Requirement to cease transactions, etc.

9 (1) Where in relation to any customer, a relevant person is

unable to apply customer due diligence measures in accordance with the

provisions of these Regulations he

(a) shall not carry out a transaction with or for the

customer through a bank account;

(b) shall not establish a business relationship or carry out

an occasional transaction with the customer;

(c) shall terminate any existing business relationship with

the customer; and

(d) shall consider whether he is required to make a

disclosure by section 46(2) of the Proceeds of Crime Act

1997 or paragraph 1 of Part I of Schedule I of the Anti-

Terrorism (Financial and Other Measures) Act 2004.

(2) Paragraph (1) does not apply where a professional legal

adviser is in the course of ascertaining the legal position for his client or

performing his task of defending or representing that client in, or

concerning, legal proceedings, including advice on instituting or avoiding

proceedings.

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



10



Simplified due diligence

10 (1) A relevant person is not required to apply the customer due

diligence measures referred to in regulation 5(a), (b) or (c) in the

circumstances mentioned in regulation 6(1)(a), (b) or (d) where he has

reasonable grounds for believing that the customer, product or

transaction related to such product, falls within any of the following

paragraphs.

(2) The customer is

(a) a financial institution which is subject to the

requirements of these Regulations; or

(b) a financial institution (or equivalent institution) which

(i) is situated in a country or territory other than

Bermuda which imposes requirements

equivalent to those laid down in these

Regulations; and

(ii) is supervised for compliance with those

requirements.

(3) The customer is a company whose securities are listed on

an appointed stock exchange.

(4) The customer is an independent professional (or similar

professional) and the product is an account into which monies are

pooled, provided that

(a) where the pooled account is held in a country or

territory other than Bermuda

(i) that country or territory imposes requirements

to combat money laundering and terrorist

financing which are equivalent to those laid

down in these Regulations; and

(ii) the independent professional is supervised in

that country or territory for compliance with

those requirements; and

(b) information on the identity of the persons on whose

behalf monies are held in the pooled account is

available, on request, to the institution which acts as a

custodian for the account.

(5) The customer is a public authority in Bermuda.

(6) The product is

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



11



(a) a life insurance contract where the annual premium is

no more than $1,000 or where a single premium of no

more than $2,500 is paid for a single policy;

(b) an insurance contract for the purpose of a pension

scheme where the contract contains no surrender clause

and cannot be used as collateral; or

(c) a pension, superannuation or similar scheme which

provides retirement benefits to employees, where

contributions are made by an employer or by way of

deduction from an employee's wages and the scheme

rules do not permit the assignment of a member's

interest under the scheme.

(7) The product and any transaction related to such product

fulfils all the conditions set out in paragraph 1 of the Schedule.

Enhanced customer due diligence

11 (1) A relevant person must apply on a risk-sensitive basis

enhanced customer due diligence measures—

(a) in accordance with paragraphs (2) to (4);

(b) in any other situation which by its nature can present a

higher risk of money laundering or terrorist financing.

(2) Where the customer has not been physically present for
identification purposes, a relevant person must take specific and
adequate measures to compensate for the higher risk, for example by
applying one or more of the following measures

(a) ensuring that the customer's identity is established by

additional documents, data or information;

(b) supplementary measures to verify or certify the

documents supplied, or requiring confirmatory

certification by a financial institution (or equivalent

institution) which is subject to equivalent Regulations;

(c) ensuring that the first payment is carried out through

an account opened in the customer's name with a

banking institution.

(3) A banking institution (the “correspondent”) which has or

proposes to have a correspondent banking relationship with a

respondent institution (the “respondent”) from a country or territory

other than Bermuda must

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



12



(a) gather sufficient information about the respondent to

understand fully the nature of its business;

(b) determine from publicly-available information the

reputation of the respondent and the quality of its

supervision;

(c) assess the respondent's controls relating to anti-money

laundering control and anti-terrorism financing controls;

(d) obtain approval from senior management before

establishing a new correspondent banking relationship;

(e) document the respective responsibilities of the

respondent and correspondent;

(f) be satisfied that, in respect of those of the respondent's

customers who have direct access to accounts of the

correspondent, the respondent

(i) has verified the identity of, and performs

ongoing due diligence on, such customers; and

(ii) is able upon request to provide relevant

customer due diligence data to the

correspondent.

(4) A relevant person who proposes to have a business

relationship or carry out an occasional transaction with a politically

exposed person must

(a) have approval from senior management for establishing

a business relationship with that person;

(b) take adequate measures to establish the source of

wealth and source of funds which are involved in the

business relationship or occasional transaction; and

(c) where the business relationship is entered into, conduct

enhanced ongoing monitoring of the business

relationship.

(5) In paragraph (4), “a politically exposed person" means a

person to whom paragraph (6) applies.

(6) This paragraph applies to a person who is in any country or

territory outside Bermuda—

(a) an individual who is or has, at any time in the preceding

year, been entrusted with prominent public functions;

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



13



(b) a person who falls in any of the categories listed in

paragraph 2(1)(a) of the Schedule;

(c) an immediate family member of a person referred to in

sub-paragraph (a) including a person who falls in any of

the categories listed in paragraph 2(1)(d) of the Schedule;

or

(d) a known close associate of a person referred to in sub-

paragraph (a) including a person who falls in either of

the categories listed in paragraph 2(1)(e) of the Schedule.

(7) For the purpose of deciding whether a person is a known

close associate of a person referred to in paragraph (6) (a), a relevant

person need only have regard to information which is in his possession

or is publicly known.

Branches and subsidiaries

12 (1) A financial institution must require its branches and

subsidiary undertakings which are located in a country or territory other

than Bermuda to apply, to the extent permitted by the law of that

country or territory, measures at least equivalent to those set out in

these Regulations with regard to customer due diligence measures,

ongoing monitoring and record-keeping.

(2) Where the law of such a country or territory does not permit

the application of such equivalent measures by the branch or subsidiary

undertaking located in that country or territory, the financial institution

shall—

(a) inform the Bermuda Monetary Authority accordingly;

and

(b) take additional measures to handle effectively the risk of

money laundering and terrorist financing.

(3) In this regulation “subsidiary undertaking” except in

relation to an incorporated friendly society, has the meaning given by

section 86 of the Companies Act („parent and subsidiary undertakings‟)

and, in relation to a body corporate in or formed under the law of a

country or territory other than Bermuda, includes an undertaking which

is a subsidiary undertaking within the meaning of any rule of law in

force in that country or territory.

Shell banks, anonymous accounts etc.

13 (1) A banking institution shall not enter into, or continue, a

correspondent banking relationship with a shell bank.

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



14



(2) A banking institution must take appropriate measures to

ensure that it does not enter into, or continue, a corresponding banking

relationship with a bank which is known to permit its accounts to be

used by a shell bank.

(3) A financial institution must not set up an anonymous

account or an anonymous pass book for any new or existing customer.

(4) As soon as possible after the commencement of these

Regulations all financial institutions must apply customer due diligence

measures to, and conduct ongoing monitoring of, all anonymous

accounts and passbooks in existence on that date and in any event

before such accounts or passbooks are used in any way.

(5) A "shell bank" means a banking institution, or an

institution engaged in equivalent activities, incorporated in a jurisdiction

in which it has no physical presence involving meaningful decision

making and management, and which is unaffiliated with a regulated

financial group.

Reliance on third parties

14 (1) A relevant person may rely on a person who falls within

paragraph (2) [or who the relevant person has reasonable grounds to

believe falls within paragraph (2)] to apply any customer due diligence

measures provided that —

(a) the other person consents to being relied on; and

(b) notwithstanding the relevant person‟s reliance on the

other person,

the relevant person remains liable for any failure to apply such

measures.

(2) The persons are —

(a) a financial institution;

(b) a relevant person who is—

(i) an independent professional; and

(ii) is supervised for the purposes of these

Regulations by the Bermuda Bar Association or,

as the case may be, the Institute of Chartered

Accountants of Bermuda.

(c) a person who carries on business in a country or

territory other than Bermuda who is

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



15



(i) an institution that carries on business

corresponding to the business of financial

institutions or independent professional;

(ii) in the case of an independent professional,

subject to mandatory professional registration

recognised by law;

(iii) subject to requirements equivalent to those laid

down in these Regulations; and

(iv) supervised for compliance with requirements

equivalent to supervision by his supervisory

authority.

(3) Nothing in this regulation prevents a relevant person

applying customer due diligence measures by means of an outsourcing

service provider or agent provided that the relevant person remains liable

for any failure to apply such measures.

PART 3

RECORD-KEEPING, SYSTEMS, TRAINING ETC.

Record-keeping

15 (1) A relevant person must keep the records specified in

paragraph (2) for at least the period specified in paragraph (3).

(2) The records are

(a) a copy of, or the references to, the evidence of the

customer's identity obtained pursuant to regulation 6,

11, 13(4) or 14;

(b) the supporting evidence and records (consisting of the

original documents or copies admissible in court

proceedings) in respect of the business relationships and

occasional transactions which are the subject of

customer due diligence.

(3) The period is five years beginning on the date on which the

business relationship ends, or, in the case of an occasional transaction,

five years beginning on the date on which the transaction is completed.

(4) A relevant person who is relied on by another person must

keep the records specified in paragraph (2)(a) for five years beginning on

the date on which he is relied on for the purposes of regulation 6, 11 or

13(4) in relation to any business relationship or occasional transaction.

(5) But in any case where a police officer has notified a relevant

person in writing that particular records are or may be relevant to an

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



16



investigation which is being carried out, the relevant person must keep

the records pending the outcome of the investigation.

(6) A person referred to in regulation 14(2) (a) or (b) who is

relied on by a relevant person must, if requested by the person relying on

him within the period referred to in paragraph (4)—

(a) as soon as reasonably practicable make available to the

person who is relying on him any information about the

customer (and any beneficial owner) which he obtained

when applying customer due diligence measures; and

(b) as soon as reasonably practicable forward to the person

who is relying on him copies of any identification and

verification data and other relevant documents on the

identity of the customer (and any beneficial owner)

which he obtained when applying those measures.

(7) A relevant person who relies on a person referred to in

regulation 14(2)(c) (a “third party”) to apply customer due diligence

measures must take steps to ensure that the third party will, if requested

by the relevant person within the period referred to in paragraph (4)—

(a) as soon as reasonably practicable make available to him

any information about the customer (and any beneficial

owner) which the third party obtained when applying

customer due diligence measures; and

(b) as soon as reasonably practicable forward to him copies

of any identification and verification data and other

relevant documents on the identity of the customer (and

any beneficial owner) which the third party obtained

when applying those measures.

(8) Subparagraphs (6) and (7) do not apply where a relevant

person applies customer due diligence measures by means of an

outsourcing service provider or agent.

(9) For the purposes of this regulation, a person relies on

another person where he does so in accordance with regulation 14(1).

Systems

16 (1) A relevant person must establish and maintain appropriate

and risk-sensitive policies and procedures relating to

(a) customer due diligence measures and ongoing

monitoring;

(b) reporting;

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



17



(c) record-keeping;

(d) internal control;

(e) risk assessment and management;

(f) the monitoring and management of compliance with and

the internal communication of such policies and

procedures in order to prevent activities related to money

laundering and terrorist financing.

(2) The policies and procedures referred to in paragraph (1)

include policies and procedures—

(a) which provide for the identification and scrutiny of—

(i) complex or unusually large transactions;

(ii) unusual patterns of transactions which have no

apparent economic or visible lawful purpose;

and

(iii) any other activity which the relevant person

regards as particularly likely by its nature to be

related to money laundering or terrorist

financing;

(b) which specify the taking of additional measures, where

appropriate, to prevent the use for money laundering or

terrorist financing of products and transactions which

might favour anonymity;

(c) to determine whether a customer is a politically exposed

person;

(d) under which

(i) anyone in the organisation to whom information

or other matter comes in the course of the

business as a result of which he knows or

suspects that a person is engaged in money

laundering or terrorist financing is required to

comply with sections 46(5) of the Proceeds of

Crime Act 1997 or, as the case may be, section 9

or paragraph 1 of Part 1 of Schedule 1 to the

Anti-Terrorism (Financial and Other Measures)

Act 2004; and

(ii) where a disclosure is made to the nominated

officer, he must consider it in the light of any

relevant information which is available to the

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



18



relevant person and determine whether it gives

rise to knowledge or suspicion that a person is

engaged in money laundering or terrorist

financing.

(3) A financial institution must communicate where relevant

the policies and procedures which it establishes and maintains in

accordance with this regulation to its branches and subsidiaries which

are located outside Bermuda.

(4) A financial institution must have systems in place enabling

it to respond as soon as reasonably practicable to enquiries from the

Financial Intelligence Agency or a police officer

(a) whether it maintains, or has maintained during the

previous five years, a business relationship with any

person; and

(b) the nature of that relationship.

Internal reporting procedures

17 (1) A relevant person must maintain internal reporting

procedures which require that

(a) the reporting officer to whom a report is to be made of

any information or other matter which comes to the

attention of an employee and which in the opinion of

that employee gives rise to a knowledge or suspicion that

another person is engaged in money laundering or

terrorist financing;

(b) any such report be considered by the reporting officer in

the light of all other relevant information for the purpose

of determining whether or not the information or other

matter contained in the report does give rise to such a

knowledge or suspicion;

(c) the reporting officer be given access to any other

information which may be of assistance to him in

considering the report; and

(d) the reporting officer disclose to the Financial Intelligence

Agency the information or other matter contained in a

report, where the reporting officer knows or suspects

that a person is engaged in money laundering or

terrorist financing.

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



19



(2) Paragraph (1) does not apply where the relevant person is

an individual who neither employs nor acts in association with any other

person.

Training etc.

18 (1) A relevant person must take appropriate measures so that

all relevant employees of his are

(a) made aware of the law relating to money laundering and

terrorist financing; and

(b) regularly given training in how to recognise and deal

with transactions which may be related to money

laundering or terrorist financing.

(2) For the purposes of this paragraph, an employee is a

relevant employee if, at any time in the course of his duties, he has, or

may have access to any information which may be relevant in

determining whether any person is engaged in money laundering or

terrorist financing.

Offences

19 (1) A person who fails to comply with any requirement in
regulations 6(1), (2) and (3), 7(1) and (3), 8(2), 9(1)(a), (b) and (c), 11(1),

12(1) and (2), 13(1), (2), (4) and (5), 15(1), (4), (5), (6) and (7), 16(1), (3)

and (4), and 18(1) is guilty of an offence and liable —

(a) on summary conviction, to a fine of $50,000;

(b) on conviction on indictment to a fine of $750, 000 or to

imprisonment for a term of two years or to both.

(2) In deciding whether a person has committed an offence

under paragraph (1), the court must consider whether he followed any

relevant guidance which was at the time—

(a) issued by a supervisory authority;

(b) approved by the Minister; and

(c) published in in a manner approved by the Minister as

appropriate in his opinion to bring the guidance to the

attention of persons likely to be affected by it. .

(3) A person is not guilty of an offence under this regulation if

he took all reasonable steps and exercised all due diligence to avoid

committing the offence.

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



20



(4) Where a person is convicted of an offence under this

regulation, he shall not also be liable to a civil fine imposed by or under

any statutory provision in relation to the same matter.

BR 9/1998 revoked

20 The Proceeds of Crime (Money Laundering) Regulations 1998 are

revoked.



SCHEDULE (Regulation 10(7))

SIMPLIFIED DUE DILIGENCE AND POLITICALLY EXPOSED

PERSONS

Simplified due diligence

1 For the purposes of regulation 10(7), the conditions are—

(a) the product has a written contractual base;

(b) any related transaction is carried out through an

account of the customer with a banking institution

which is subject to these Regulations or a banking

institution situated in a country or territory other than

Bermuda which imposes requirements equivalent to

those laid down in these Regulations;

(c) the product or related transaction is not anonymous and

its nature is such that it allows for the timely application

of customer due diligence measures where there is a

suspicion of money laundering or terrorist financing;

(d) the product is within the following maximum threshold—

(i) in the case of insurance policies or savings

products of a similar nature, the annual

premium is no more than $1,000 or there is a

single premium of no more than $ 2,500;

(ii) in the case of products which are related to the

financing of physical assets where the legal and

beneficial title of the assets is not transferred to

the customer until the termination of the

contractual relationship (whether the

transaction is carried out in a single operation

or in several operations which appear to be

linked), the annual payments do not exceed

$15,000;

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



21



(iii) in all other cases, the maximum threshold is

$15,000.

(e) the benefits of the product or related transaction cannot

be realised for the benefit of third parties, except in the

case of death, disablement, survival to a predetermined

advanced age, or similar events;

(f) in the case of products or related transactions allowing

for the investment of funds in financial assets or claims,

including insurance or other kinds of contingent

claims—

(i) the benefits of the product or related transaction

are only realisable in the long term;

(ii) the product or related transaction cannot be

used as collateral; and

(iii) during the contractual relationship, no

accelerated payments are made, surrender

clauses used or early termination takes place.

Politically exposed persons

2 (1) For the purposes of regulation 11(6)—

(a) individuals who are or have been entrusted with

prominent public functions include the following—

(i) heads of state, heads of government, ministers

and deputy or assistant ministers;

(ii) members of parliaments;

(iii) members of supreme courts, of constitutional

courts or of other high-level judicial bodies

whose decisions are not generally subject to

further appeal, except in exceptional

circumstances;

(iv) members of courts of auditors or of the boards

of central banks;

(v) ambassadors, chargés d'affaires and high-

ranking officers in the armed forces; and

(vi) members of the administrative, management or

supervisory bodies of State-owned enterprises;

PROCEEDS OF CRIME (ANTI-MONEY LAUNDERING AND ANTI-
TERRORIST FINANCING) REGULATIONS 2008



22



(b) the categories set out in sub-paragraphs (i) to (vi) of

paragraph (a) do not include middle-ranking or more

junior officials;

(c) the categories set out in sub-paragraphs (i) to (v) of

paragraph (a) include, where applicable, positions at

domestic and international level;

(d) immediate family members include the following—

(i) a spouse;

(ii) a partner;

(iii) children and their spouses or partners; and

(iv) parents;

(e) persons known to be close associates include the

following—

(i) any individual who is known to have joint

beneficial ownership of a legal entity or legal

arrangement, or any other close business

relations, with a person referred to in

regulation11(6)(a); and

(ii) any individual who has sole beneficial ownership

of a legal entity or legal arrangement which is

known to have been set up for the benefit of a

person referred to in regulation 11(6)(a).

(2) In paragraph (1) (d), “partner” means a person who is

considered by his national law as equivalent.





Made this 24th day of November, 2008







Minister of Justice