Dear Members of the Bermuda Bar Association and Chartered Professional Accountants of Bermuda:

Changes to the Registration Regime for Barristers and Accountants 2021

As you know and as explained on our website, the Barristers and Accountants AMLATF Board  (the "Board") is a statutory board established jointly by the Chartered Professional Accountants of Bermuda (CPA Bermuda) and the Bermuda Bar Association (the "Bermuda Bar"), pursuant to Section 8A of the Institute of Chartered Accountants of Bermuda Act 1973 and Section 25A of the Bermuda Bar Act 1974.   The Board has been designated by the Minister of Justice under Section 4(1) of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act, 2008 (the “Act”) to be the supervisory authority for regulated professional firms (barristers and accountants) as defined by Regulation 2 of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 (“the AML/ATF Regulations”).

Since inception the Board has been funded by way of a fee levied by (i) CPA Bermuda in accordance with section 7A(g) of the Chartered Professional Accountants of Bermuda Act 1973, which says that the CPA Bermuda, in conjunction with the Bar Council may make by-laws respecting the Barristers and Accountants AML/ATF Board, including by-laws

“…fixing the fees payable by firms to defray the operational costs of the Barristers and Accountants AML/ATF Board and providing for penalties to be assessed against firms who fail to pay such fees, including the suspension, termination or expulsion from CPA Bermuda of members practising with such firms.”

And (ii) by way of Section 9(ea) of the Bermuda Bar Act 1974 says that the Bar Council may make rules

“…fixing the fees payable by firms to defray the operational costs of the Barristers and Accountants AML/ATF Board and providing for penalties to be assessed against firms who fail to pay such fees, including the withdrawal of the practising certificates of barristers practising for such firms”

CPA Bermuda and Bermuda Bar levied fees on their respective members in line with a Memorandum of Understanding (“MOU”) between CPA Bermuda and Bermuda Bar, which laid out the respective organizations’ funding obligations. That MOU expired some time ago, following which both CPA Bermuda and Bermuda Bar advised the Board that the fees levied on their respective members to support the regulatory activities of the Board needed to be re-examined.  

As a result of this notification, and to try and assist both CPA Bermuda and the Bermuda Bar, the Board has been working within the Mutual Assistance Committee (“MAC”) which is comprised of members of the Board, CPA Bermuda and Bermuda Bar to find a more equitable way of funding the Board’s activities.   As a consequence of this consultative process, a new funding arrangement has been tentatively agreed upon by the MAC set out below, subject to input and further feedback from CPA Bermuda and Bermuda Bar members.  In addition, the Board has also changed its processes and procedures to allow for a more streamlined registration process following feedback from registrants (also set out below).

Funding:

  • It is proposed that all professional firms per the AML/ATF Regulations that do not engage in specified activities (i.e. unregulated) shall pay a registration fee to the Board of $750.00 (per professional firm, not per person) per annum; and
  • It is proposed that all professional firms per the AML/ATF Regulations that engage in specified activities (i.e. regulated) will pay a registration fee to the Board of 1% of gross revenue related to those specified activities per annum as declared to the Board upon registration in the preceding year (minimum $750.00).

It is anticipated that over 80% of regulated firms will see a decrease in their registration fees.  A minimum number will have a small increase in registration fees with a few others having a much larger increase. 

Administration:

  • CPA Bermuda will send invoices directly to accountancy registrants with payments collected by CPA Bermuda for onward transmission to the Board.
  • The Board, on behalf of the Bermuda Bar, will send invoices directly to barrister registrants for payment directly to the Board. The invoices will be issued at the same time as the practicing certificate renewal process by the Bermuda Bar (save for this transition year).
  • The Board will issue registration certificates to each registrant upon payment being satisfied.
  • Non-payment will result in registration certificates not being issued or further action being taken by the Bermuda Bar or CPA Bermuda as appropriate pursuant to the various acts governing the Board and its supervisory duties.

The Board in consultation with the MAC carefully examined three more options in regards to funding, in particular:

 (a) charging a registration fee per individual barrister/accountant (regardless of whether they engage in specified activity);

(b) charging a fee as a percentage of overall gross revenue of each regulated firm;

(c) charging a fee per specified activity transaction of regulated firms. 

None of these options were deemed suitable by the MAC. The Board welcomes feedback to the fee proposal via email:  This email address is being protected from spambots. You need JavaScript enabled to view it. by 26th January 2021.  

 

Registration

We also write to remind you of the necessity to register annually with the Board, with the deadline being 31 January in each year (guidance note below).

A significant difference from last year is that this year all registrations will be filed electronically using our new web portal which can be accessed here: //portal.amlatfboard.bm (it will be live imminently).

Importantly, if your entity was classified as “Non-Regulated” in the previous year, you are simply required to submit the Basic Registration Information, complete the various declarations and submit payment. In other words, there is less of an administrative burden for “Non-Regulated” entities moving forward. This has been amended thanks to feedback from registered entities.

During the past year, the Board has invested significantly in terms of human resources and systems.  It has also been an active participant in the national exercise of the FATF Mutual Evaluation. Arising from that, the National Anti-Money Laundering Committee and its Supervisory Forum have set out a detailed coordinated programme for Bermuda, to which the Board ascribes.  The consequence for registered firms will be much closer interaction with the Board than firms may previously have experienced, according to a timetable which will be strictly enforced.

Firms will recall that supervision is exercised using a risk-based approach.  Accordingly, significant data is required in order to enable the Board to determine whether a firm is to be regulated in any one year and also to assess risk, both for the rating of an individual firm and to understand risk across the legal and accounting sectors as a whole.  To that end, the following material will be required to be included with the registration submission or supplied at a later date as indicated below: -

Information Required

Due Date

Annual Registration (includes payment)

January 31st 2021 (subject to feedback)

*Entity Risk Assessment

March 31st 2021

*Mitigants Questionnaire

March 31st 2021

*Independent AML/ATF Audit

April 30th 2021

*Please Note: Commencing January 2022, the above Data Calls must also be submitted with the Annual Registration due in January of each year.

The Board recognises the workload involved in meeting your statutory responsibilities and stands ready to assist firms by way of training sessions and individual consultations.  Please contact the Board’s office on 296-5577 to make an appointment, if needed. Equally, the Board wishes to indicate that the number of firms now registered and the scope of AML/ATF compliance requirements in view of the FATF effectiveness expectations is such that the Board will be obliged to take a strict line on deadlines and complete supply of material requested.

In addition to the above, those firms who have not as yet been subjected to formal examination of their procedures may expect shortly to receive letters from the Supervisor concerning desk top reviews, which will commence after receipt of their Policies and Procedures at the time of reregistration.

As you will note the Board has listened to the feedback provided in regards to the portal, as well as the feedback in regards to documents that need to be submitted by entities that were not engaging in regulated activities. The Board has also received further feedback regarding the information being requested from regulated firms. In particular we have fielded a number of queries regarding the reasoning for entities disclosing fee overall revenue information and other related fields. It should be noted that Bermuda currently uses the World Bank Tool for completing the ML/TF National Risk Assessment and details such as the total turnover or total value or amount of all transactions handled by a particular profession are required as a data source for the completion and evaluation of segments of the above-mentioned Tool.  As the objective for the collection of this data source is to assist in assessing the importance of a particular profession in Bermuda’s economy compared to other sectors that are also being assessed, it may be likely that the requirement to produce this information will continue to be required by the Board.  We can also confirm that this data and all other data collected by the Board remains confidential and any references to same are completely anonymized. Nevertheless, we are in the process of deciding if it is appropriate to remove some of those requirements in the future and will revert in due course.    Notwithstanding this exercise, you will still be required to submit all required information as requested for 2021.

Guidance Notes for Web Registration

Annual registration with the AMLATF Board for 2021 will be completed on the new AML/ATF Board Registration Portal which is now active.

Note that the information required is the same information as in previous years, but it is now submitted digitally with the following exception:

  • If your company was classified as “Not Regulated” in the previous year, you are simply required to submit the Basic Registration Information, complete the declaration and submit payment.
  • If your company was classified as a “Regulated Entity”* in the previous year, you are required to complete the FULL registration process.

* If your company was classified as a “Regulated Entity” in the previous year, and you wish to be re-classified, a written application must be made to the AMLATF Board AFTER completing the FULL registration.

Registration Process

When you first access the portal, it will prompt you to set up a User Account:

Once you complete the User Account information you will be prompted to submit the Basic Registration Information:

General Information

  • Structure & Operations
  • Ownership & Control
  • Subsidiaries & Affiliates
  • Organizational Chart
  • Fit & Proper Persons Information (and upload)
  • Business Administration
  • Non-Regulated Entity Registration

Once this information has been submitted, Companies that are “Not Regulated” can make a Declaration that:

You will then be directed to the formal Declaration page where you will Declare:

Following the Declaration, you will be directed to the Payment Page where your registration fee can be paid online via credit card or you can indicate how payment will be submitted (online or cheque).

  • Regulated Entity Registration

If you are Regulated Entity, you will continue the registration process and submit the balance of the required information:

  • Nature of business
    • Practice areas
    • Teams
    • Product types
  • Client Transactions
    • Upload data
    • Review data
    • CFO approval
  • Financial information
  • POCA regulations documents
  • Risk data
    • Customers
    • Transactions
    • Geographic
    • Channels of delivery
    • Suspicious activity
  • Declaration
  • Payment

Once this information has been submitted, you will make the following Declaration:

Following the Declaration, you will be directed to the Payment Page where your registration fee can be paid online via credit card or you can indicate how payment will be submitted (online or cheque).

AMLATF Board Review

Once the Basic Registration Information has been reviewed and payment received, the AMLATF Board will issue an Annual Registration Certificate, which will expire on December 31st of the registration year.

__________________

In conclusion, the Board is keen to work with both CPA Bermuda and Bermuda Bar members to continue building and consolidating a robust and effective regulatory regime.  Much work has been done by the Board, the Supervisor Kim Wilson and the Assistant Supervisor Martin Russell to assist registrants and provide the necessary guidance when required. I take this opportunity to thank Warren Cabral who completed his term as Board Chair on 30th June 2020 and helped build a respected AML/ATF supervisory body.  I believe that upon successful registration using the new registration portal and continued streamlining of our processes the Board is well placed to meet the regulatory challenges of 2021 and beyond.

For day-to -day queries or if you wish to speak to me or any members of the supervisory team please contact our (new) Technical Officer/Office Manager, Peter Aldrich by email: This email address is being protected from spambots. You need JavaScript enabled to view it. who will be pleased to assist you.

Yours faithfully

Hon. Michael M. Fahy, JP

Chairman of the Board

Report of the activities of the Barristers & Accountants AML/ATF Board (the “Board”) for the year ending 31st March 2020

This report is published in accordance with Section 5(3)(b) of the Proceeds of Crime (Anti-money Laundering and Anti-terrorist Financing Supervision and Enforcement) Act 2008 (the “Act) for the calendar year ending 31st March 2020.

Click here to view the full report in .PDF format.

Summary

The most significant event of the preceding year is the successful conclusion of the Financial Action Task Force Mutual Evaluation Report (“MER”).  This process culminated in a plenary session in Antigua attended by the Supervisor, Kim Wilson.  Bermuda overall was awarded the top position worldwide for technical compliance and was among the top ten for effectiveness of supervision. That success embraced the reforms made to the rules and regulations governing the legal and accounting professions referred to in the Board’s reports from preceding years.  Those modernised rules cover entry and exit to the professions with requirement for a Fit and Proper Person certification, extended rules for compliance with AML/ATF supervisory directions, emphasised training, and required the ring-fencing of corporate administrative business (which is higher risk), among other things.  The MER, in accepting without comment the Board’s new risk-based technical regime, implicitly therefore recognises that the Board meets the technical standards expected by FATF.

As to effectiveness, general observations applicable to all Bermuda’s supervisors in the non-financial sector were made in the MER report.  They had the following nature: supervised entities to conduct self-risk analysis; focus on the filing of suspicious activity reports; supervised entities regularly to check their risk methodologies; supervisory understanding of sectoral risk; adequate staffing; training.  The Board has already implemented procedures for all these items.  In particular, the Board fully revised its supervisory framework and hired additional staff to support the Supervisor. Click here for the full report.
W. Cabral
Chairman

To read the Chairman's report in its entirety please access the link above. 

The Government of Bermuda's Ministry of Legal Affairs on 12 May 2020 issued a Minsiterial Statement based on updated guidance from FATF on Money Laundering and Terrorist Financing controls in higher risk jurisdictions. 

As the nature and level of risk differ between the jurisdictions listed, it is important the advisory and annexes are read in their entirety. Please the below link to the document issued by the Government of Bermuda. 

AML ATF Ministerial Statement 1 2020

 

CFATF Releases '101 Series' on Money Laundering & Terrorist Financing

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CFATF have released a new research corner featuring both a 'Money Laundering 101' and 'Terrorist Financing 101' series on understanding what they are and how they occur.

Click the links to access the documents, or click here to view them on CTATF's website.

Please review the below linked document issued by the Government of Bermuda's Ministry of Legal Affairs on 9 August 2019. 

 

MoLA AML ATF Advisory 2 2019

Please see attached document for the presentation provided at the 9 July 2019 town hall regarding the Data Harmonization project. 

July 9 2019 Town Hall Presentation

This post is a courtesy from the Board to all Regulated Professional Firms (RPF). RPFs are reminded it is their responsibility to regularly check and stay up-to-date with the official Bermuda Government notices issued from the NAMLC office and the FSIU of the Ministry of Legal Affairs. 

This is to advise of recent amendments to Bermuda’s Sanctions Regime. The UK recently implemented:

  1. i) The Sanctions (Overseas Territories) (Amendment of Information Provisions) Order 2018 (“Information Provisions OT Order”) on 7 November, 2018, which automatically amended relevant OT Orders already in force in Bermuda; and
  2. ii) The Chemical Weapons (Sanctions) (Overseas Territories) Order 2018 (“Chemical Weapons Order”), which came into force in the UK and Bermuda on 9 January, 2019.
  1. Sanctions (Overseas Territories) (Amendment of Information Provisions) Order 2018

The Information Provisions OT Order was created in order to bring designated non-financial businesses and professions (DNFBPs) into scope for enforcement under certain Orders in Council that are in force in the overseas territories. The said order and the Explanatory Memorandum can be found on the UK Government’s legislation website here.

The amendments contained in the Information Provisions OT Order automatically apply to Bermuda as the amendments are in respect of specific OT Orders that are already in force in Bermuda. Industry is reminded that Bermuda amended the International Sanctions Regulations 2013 (“ISR”) on 17 September 2018 by way of the International Sanctions Amendment Regulations 2018, which brought DBFBPs into scope for enforcement under Bermuda’s sanctions regimes. The IRS was amended to ensure that DNFBPs were captured as the UK had not yet brought DNFBPs into scope in its overseas territories.  As noted above, the UK have now brought the Information Provisions OT Order into force, which means that the provisions set out in Regulation 2A of the ISR are no longer necessary. Therefore the INTERNATIONAL SANCTIONS AMENDMENT (NO. 2) REGULATIONS 2018 was made on 20 December, 2018 and came into force on 21 December 2018, in order to revoke Regulation 2A of the ISR. The International Sanctions Amendment (No. 2) Regulations 2018 was gazetted in the Official Gazette on 21 December 2018 and can be found here.

In light of the amendment you should ensure, where applicable, that the Information Provisions OT Order is read in conjunction with the OT Order. Please be reminded that OT Orders in force in Bermuda are set out in Schedule 1 of the ISR.

For the sake of clarity, the effect of the Information Provisions OT Order is to impose requirements on relevant financial institutions to provide information to the relevant authority of the relevant territory if they know or suspect that a customer is the subject of an asset freeze for the purposes of the relevant financial sanctions regime, or has committed certain offences under the relevant Order. These requirements are extended to specified businesses and professions, namely auditors, casinos, dealers in precious metals and stones, external accountants, independent legal professionals, real estate agents, tax advisors, and trust or company service providers.

As noted above, these requirements have been in force in Bermuda since 17 September, 2018.

  1. Chemical Weapons (Sanctions) (Overseas Territories) Order 2018

Please be advised that effective 9 January, 2018, the Chemical Weapons (Sanctions) (Overseas Territories) Order 2018 came into force. The said Order and the Explanatory Memorandum can be found on the UK Government’s legislation website here.

The Chemical Weapons Order was made by the UK Privy Council on 12 December, 2018 and was laid before the UK Parliament on 19 December, 2018, and gives effect to the sanctions regime created by the European Union in Council Decision (CFSP) 2018/1544 on 15th October 2018 concerning restrictive measures against the proliferation and use of chemical weapons; and in Council Regulation (EU) 2018/1542 of 15th October 2018 concerning restrictive measures against the proliferation and use of chemical weapons.

The Chemical Weapons Order was brought into force via Bermuda’s International Sanctions Regulations 2013, which were amended by the INTERNATIONAL SANCTIONS (CHEMICAL WEAPONS) AMENDMENT REGULATIONS 2018, which was gazetted in the Official Gazette on 21 December 2018, and came into force in Bermuda on 9 January 2019, and can be found here.

Please review the below statement issued by Financial Sanctions Implementation Unit of the Ministry of Legal Affairs:

Please be advised that The Cabinet Office issued a Press Release on 26 November, 2018, regarding an Advisory issued by the Minister of Legal Affairs on the 'Money Laundering and Terrorist Financing controls in higher jurisdictions: Requirement to apply Enhanced Due Diligence in higher risk jurisdictions.'  The said advisory has been posted on the Government website and can be found here.  The Minister noted that the Advisory is especially relevant to those entities that have or are considering any business relationships with the specified jurisdictions or individuals or corporate entities in such jurisdictions.

The Advisory is in response to a Financial Action Task Force (FATF) statement dated 19 October 2018, and advises regulated sectors and relevant persons to:

  1. Consider Democratic People’s Republic of Korea (DPRK) as high risk for the purposes of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008, and apply counter measures and enhanced due diligence measures in accordance with the risks.
  1. Consider Iran as high-risk for the purposes of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008, and apply enhanced due diligence measures in accordance with the risks.
  1. For the below jurisdictions, take appropriate actions to minimise the associated risks, which may include enhanced due diligence measures in high-risk situations:
    1. The Bahamas
    2. Botswana
    3. Ethiopia
    4. Ghana
    5. Pakistan
    6. Serbia
    7. Sri Lanka
    8. Syria
    9. Trinidad and Tobago
    10. Tunisia
    11. Yemen

 Financial Sanctions

DPRK, Iran, Syria, Tunisia and Yemen are also subject to financial sanctions in Bermuda. Therefore, regulated sectors and relevant persons also need to comply with the relevant financial sanctions measures that are set out in the respective Overseas Territories Orders for each regime.

Please note that as the nature and level of risk in the specified jurisdictions differ and it is important that the advisory and the annexes are read in their entirety.

Please see the attached document relating to the registration requirements for firms and renewal requirements for current RPFs:

 

InfoBulletin Graphic

Information Bulletin on RPF Registration & Renewals

GUIDANCE NOTES
Guidance Notes Icon Accounting Sector

 

GUIDANCE NOTES - ACCOUNTING SECTOR

 FATF Issued Guidance for a Risk-Based Approach for the Accounting Profession


Guidance Notes Icon Legal Sector
GUIDANCE NOTES - LEGAL SECTOR

FATF Issued Guidance for a Risk-Based Approach for Legal Professionals


 

Bermuda Government Issued Guidance on Money Laundering & Terrorist Financing Controls in Higher Risk Jurisdictions


Legislative Bulletin

This document contains recent legislative changes to AML/ATF laws in Bermuda and was issued by the Government of Bermuda's National Anti-Money Laundering Committee. 


 

CFATF Releases '101 Series' on Money Laundering & Terrorist Financing

 

logo cover

 

CFATF have released a new research corner featuring both a 'Money Laundering 101' and 'Terrorist Financing 101' series on understanding what they are and how they occur. Click the links to access the documents, or click here to view them on CTATF's website.

 


FATF ML TF Graphic for Website

FATF Report: Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals June 2013

See the above FATF Report on the FATF Website


RED FLAGS

 Red Flags Identified for Legal Professionals

 

Red Flags Identified for Accounting Professionals

 

TYPOLOGIES

 ML & TF Typologies