Overview
Bermuda is a self-governing British Overseas Territory which implements UK sanctions. Unlike other OTs (e.g. see Cayman Islands), UK sanctions do not automatically come into effect through Orders in Council made by the UK Privy Council. They are brought into domestic law by the International Sanctions Act 2003, the International Sanctions Regulations 2013 and the International Sanctions Amendment Regulations 2020.
Schedule 1 of the International Sanctions Amendment Regulations 2020 lists the UK sanctions legislation that are in force in Bermuda. Bermuda Sanctions Regime List 2021 also lists the UK Orders in Council that have been applied to Bermuda and the Bermuda legislation that gives effect to them.
Under the International Sanctions Act 2003, there are provisions for Bermuda to designate people and entities under its own domestic sanctions for enabling effect to be given to any international obligation of the United Kingdom relating to economic or other sanctions imposed on any country, organisation, person or group of persons. This power has not yet been used.
National Competent Authorities
Minister of Legal Affairs – responsible for the implementation of sanctions in Bermuda. Some functions are delegated to the Financial Sanctions Implementation Unit (FSIU).
Bermuda Monetary Authority – Bermuda’s financial regulator, which monitors anti-money laundering and anti-terrorist financing compliance under s 5 of the Proceeds of Crime Regulations (Supervisions and Enforcement) Act 2008.
Financial Intelligence Agency – established by the Financial Intelligence Agency Act 2007 to receive, gather, store, analyse and disseminate information relating to money-laundering, suspected proceeds of crime and terrorism-financing. The FIA receives this information via suspicious activity reports (SARs) and suspicious transaction reports (STRs).
Legislation
International Sanctions Act 2003
International Sanctions Regulations 2013
International Sanctions Amendment Regulations 2020
Anti-Terrorism (Financial and Other Measures) Act 2004
Anti-Terrorism (Financial and Other Measures)(Businesses in Regulated Sector) Order 2008
Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
Proceeds of Crime (Designated Countries and Territories) Order 1998
Proceeds of Crime Regulations (Supervisions and Enforcement) Act 2008
Sanctions Lists
The list of people and entities subject to sanctions in Bermuda is the same as the UK Consolidated List.
Bermuda has power to draw up its own list of DPs listed under Bermuda’s domestic sanctions regime but this power has not been used.
Guidance
Bermuda Monetary Authority Bermuda’s Financial Sanctions Framework (29 February 2024) webinar
The UK’s Overseas Territories and sanctions against Russia
Guidance on submitting Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs)
Licensing
The Minister of Legal Affairs is responsible for licensing.
Applicants for a licence for an activity otherwise prohibited under asset freezing measures in the Overseas Territories Orders in Council (Overseas Territories Orders) listed in the International Sanctions Act Regulations 2013 (2013 Regulations) should use the prescribed form.
For licensing that relates to a person or entity designated under the Counter-Terrorism (Sanctions) (Overseas Territories) Order 2020, the Minister must consult the UK Treasury before issuing a licence.
Licensing grounds, which are set out in the prescribed form include:
- basic expenses of the designated person or his or her dependent family members
- reasonable professional fees and reimbursement of incurred expenses associated with the provision of legal services
- fees or service charges for the maintenance of frozen funds or economic resources
- extraordinary expenses
- obligations due under a contract or agreement entered into, or an obligation which arose prior to the designation of the person or entity in question (N.B. only available for the release of frozen funds, this ground is not available to make funds or economic resources available to a designated person)
- obligations arising in connection with certain judicial, administrative or arbitral liens, decisions or judgments (N.B. only available for the release of frozen funds, this ground is not available to make funds or economic resources available to a designated person)
Other grounds may be available if the applicant specifies the ground with reference to relevant legislation.
All sanctions licence applications, notifications and authorisations should be made to:
The Minister of Legal Affairs
Financial Sanctions Implementation Unit
Global House
43 Church Street
Hamilton HM 12
Email: fsiu@gov.bm
General Licences:
UK General Licences do not extend to Bermuda, Bermuda issues its own General Licences (listed below).
Anyone intending to use a General Licence should notify the Financial Sanctions Implementation Unit (FSIU, a unit within the Ministry of Legal Affairs Headquarters) within 14 days (except in relation to: 1)a) the General Licence: Wind down of Trust Services Provided to Designated Persons; and 1)b) the General Licence: Russian Sanctions – Vessels, which in each case is 30 days; and 2) in relation to the General Licence: Russian Oil Price Cap which is 40 days or 60 days (as applicable)).
General Licence – Russia Sanctions – Legal Fees (3 January 2025)
- allows for payment for the provision of legal services to a designated person under the Russia or Belarus regimes.
General Licence – GTLK Companies and their subsidiaries – Insolvency related payments and activities (20 December 2024)
- allows payments and other permitted activities to take place in relation to insolvency proceedings associated with GTLK Europe and GTLK Capital and their subsidiaries.
General Licence: Russia Sanctions – Wind down of Trust Services Provided to Designated Persons (21 March 2023)
- permits Persons to undertake activity necessary to terminate an arrangement to provide Trust Services between them and a Designated Person, provided that the terms of the general licence are met.
General Licence: Russian Oil Price Cap (17 March 2023)
- permits the supply or delivery of Russian oil and oil products by ship, as well as provision of associated services, subject to the price cap terms being met.
General Licence: Russia Sanctions – Vessels (20 October 2022)
- authorises the provision of technical assistance, financial services, and funds, and brokering services, related to vessels, subject to restrictions set out in the licence
Enforcement
The Financial Sanctions Implementation Unit (FSIU) is a unit in the Ministry of Legal Affairs Headquarters, which is responsible for conducting certain functions on behalf of the Minister, with respect to the implementation of targeted financial sanctions for terrorism, terrorist financing and proliferation financing in Bermuda.
One of the FSIU’s functions is to monitor compliance and enforcement. It can refer cases to law enforcement agencies where necessary.
Under s 5 of the Proceeds of Crime Regulations (Supervisions and Enforcement) Act 2008, a supervisory authority is responsible for monitoring and ensuring compliance with the AML/ ATF Regulations by persons and financial groups. The AML/ ATF Regulations means the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008, and any subsequent regulations made under section 49(3) of the Proceeds of Crime Act 1997 or section 12A of the Anti-Terrorism (Financial and other Measures) Act 2004.
Under s 20, the supervisory authority can issue civil penalties for breaches of obligations under Bermuda’s sanctions regime. Maximum penalties are:
- $10m for BMA-supervised people/entities
- $250k for people/entities supervised by the Registrar
- $250k for people/entities supervised by the Superintendent of Real Estate.
If convicted of an offence under the United Kingdom Overseas Territory Orders in Council (OT Orders), the offender may receive a term of imprisonment of up to seven years or a fine or both; and on summary conviction, imprisonment for a maximum of 6 months or to a fine not exceeding £5,000.00 or its Bermuda dollar equivalent or both. See FSIU Guidance.
Reporting
Relevant firms are required to report to the Financial Sanctions Implementation Unit (FSIU, a unit in the Ministry of Legal Affairs)if they know or have reasonable cause to suspect that a person:
- is a designated person, or
- has committed an offence under the legislation.
Reports should be made using the FSIU Compliance Reporting Form.
A ‘relevant firm’ is defined in the OT Orders for each sanctions regime as:
- a relevant institution;
- an undertaking that by way of business—
- operates a currency exchange office,
- transmits money (or any representation of monetary value) by any means, or
- cashes cheques that are made payable to customers;
- a firm or sole practitioner that provides to other persons, by way of business—
- accountancy services,
- advice about tax affairs,
- auditing services,
- legal or notarial services,
- company services, or
- trust services;
- a firm or sole practitioner that carries out, or whose employees carry out, estate agency work;
- the holder of a licence to operate a casino in the Territory;
- a person engaged in the business of making, supplying, selling (including selling by auction) or exchanging—
- articles made from gold, silver, platinum, or palladium, or
- precious stones or pearls.
Reporting to the FIA:
The Financial Intelligence Agency receives, analyses and disseminates information relating to money-laundering, suspected proceeds of crime and terrorism-financing. Reports must be made to the FIA under the Anti-Terrorism (Financial and Other Measures) Act 2004 via suspicious activity reports (SARs) and suspicious transaction reports (STRs).
Under s 9 of the Anti-Terrorism (Financial and Other Measures) Act 2004 a person must to report to the FIA where they have knowledge or suspect (and such knowledge/suspicion did not arise from information acquired in the course of a trade, profession, business or employment):
- terrorism financing (via fund-raising or financial arrangements)
- money laundering
- a person is using their money or other property for the purposes of terrorism.
Pursuant to s 11 of the Anti-Terrorism (Financial and Other Measures) Act 2004, schedule 1 of the same Act, it is also an offence for a person to not report such knowledge where it comes to them in the course of a business in the regulated sector.
Reports are made via SARs or STRs using the goAML website.
Judgments
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Credit Suisse v Ivanishvili & others [2024] CA (Bda) 2 Civ
