Bermuda: Comprehensive anti-terror financing bill passed

By Amanda Dale

A Bill to update the Island's financial regulations in line with international anti-terrorism guidelines was approved in the House of Assembly last night.

MPs passed the Anti-Terrorism (Financial and Other Measures) Amendment Act 2008 with cross-party support.

The new Act broadens the meaning of 'terrorism' and provides new definitions of 'FIA' (Financial Intelligence Agency), 'international organisation', 'National Anti-Money Laundering Committee', 'professional accountant' and 'professional legal adviser'.

'Tipping off' those engaged in money laundering that an investigation is afoot is now an offence, as is "offences by bodies corporate, partnerships, and unincorporated associations" — any involvement by corporate, legal or financial professionals. This could be either through "any neglect on his part" or by an action "to organise or direct another person to commit an offence".

But there is a ban on 'double jeopardy' — to ensure that no one is tried for the same offence both under the Act and under the Terrorism (United Nations Measures) (Overseas Territories) Order 2001.

The Act amends the Anti-Terrorism (Financial and Other Measures) Act 2004. If an offence has been committed by a corporate body, due to "the consent of the connivance of an officer (eg: director, manager, secretary or chief executive) of the body corporate; or to be attributable to any neglect on his part, the officer as well as the body corporate is guilty of an offence and liable to be proceeded against and punished accordingly".

The same rules apply to a partner in a partnership or a representative of an unincorporated association.

Regarding 'tipping off', it is now an offence if a person suspects Police are investigating a matter of terrorist financing or if the FIA has received information, to then "disclose to any other person information or any other matter which is likely to prejudice that investigation".

The Act also enables the Minister of Justice — after consulting with the National Anti-Money Laundering Committee, to make further regulations he or she thinks fit "for the purposes of detecting and preventing the financing of terrorism".

These could require those working in financial services, the legal and accountancy professions, to comply with "procedures relating to the identification of clients, the keeping of records, the making of records, the vetting of employees, the verification of the effective design and operation of anti-money laundering systems and the training of employees", under guidance of the Bermuda Monetary Authority (BMA).

Activities which would fall under the remit of the Act would be: the buying and selling of property; managing client monies, securities and other assets; management of bank, savings or securities accounts; organisation of contributions for the creation or management of companies; creation, operation or management of legal persons or arrangements, and buying and selling business entities.

Michael Scott, Junior Minister of Justice, said: "This is part of a group of Bills brought before this House to strengthen Bermuda's anti-money laundering and anti-terrorist framework. It is readily accepted terrorist financing is not a high risk in Bermuda and it is not surprising that there has been no evidence to date of terrorist financing on our Island. Bermuda is low risk."

However, he said the Act was needed in order to "ensure compliance with international standards and to suppress any potential terrorist financing".

This included the filing of Suspicious Activity Reports (SARs), which would assist prosecutions both on the Island and in other jurisdictions.

Commenting on recent guidance legislation from international bodies such as the United Nations and the FATF (Financial Action Task Force), Mr. Scott said: "The Government of Bermuda has reiterated to the international community that it will bring us into compliance".

Opposition MP Pat Gordon-Pamplin said: "We support this Bill before us here today. You don't have to be a rocket scientist to realise the effect of 9/11 on the world. Changing times and a changing world have given rise to this legislation. We need to stay vigilant in order to protect our country and people from the infiltration of dirty money."

She said that although money which travels through Bermuda is considered "good money", "we need to be cognizant of the dangers".

But regarding the 'tipping off' clause, Mrs. Gordon-Pamplin warned: "There's going to be a delicate balance between an attorney representing a client and then being made aware of information relating to this client. It's going to be a thin line."

Opposition Whip John Barritt also raised concerns about the criminal offence of "neglect" by corporate employees.

He said: "We would like to express our concern that any 'neglect' is an offence. We all have bad days. Can you imagine someone letting something go through and then being liable?

"The way I read neglect is it's an absolute offence. Perhaps those who practice criminal law will be able to persuade magistrates other ways."

Deputy Opposition Leader Cole Simons, who works in the banking industry, described the SARs reports as the Island's "main under girder" in combating money laundering.

He said: "The key to it all is to know your client. If a gentleman came to Bermuda with $100,000, it does not mean he is a criminal. He could be coming to Bermuda to pay the crew of his yacht in cash. That is why these SARs are very important — for us to get information.

"But we have to be sensitive to the information we get. By this process we will more than likely be able to identify the criminal, against those who legitimately can carry that cash."

Finance Minister and Deputy Government Leader Paula Cox said: "The bar is being raised across the board for many countries and jurisdictions with regard to financial transactions.

"As we deal with the financing of terrorism and the proceeds of crime, it is necessary we have this legislation.

"This legislation, like the preceding, is important and it goes towards us making sure we have the necessary legislative framework to uphold financial propriety and integrity, and to protect Bermuda's borders from those who would seek to abuse this."

Source: The Royal Gazette