Anti-money laundering measures for charities

  • Raising standards: Sylvan Richards

    Raising standards: Sylvan Richards


Tough regulations will help to prevent charities from being used by money launderers or those involved in terrorist activity, the House of Assembly has heard.

Sylvan Richards, the Junior Minister for Home Affairs, told Parliament that the measures would reduce the risk of criminal activity and bring Bermuda in line with international standards.

“The regulations seek to honour our commitment to ensure that registered charities adhere to the highest standards of governance, particularly in relation to the prevention of them being abused for the purposes of money laundering, the financing of terrorism and other illegal activities,” Mr Richards said.

He told the House that the regulations were drafted in consultation with the National Anti-Money Laundering Committee and with the Centre on Philanthropy.

“The regulations will bring Bermuda’s charitable sector into compliance with the international standards on combating money laundering and the financing of terrorism,” Mr Richards said. “This is of great importance, as charitable organisations enjoy public trust, have access to considerable sources of funds, both public and private, and have a global presence that provides a framework for national and international operations and financial transactions.”

He said that if measures were not put in place, charities could be “vulnerable to abuse or susceptible to illegal activities engaged by others”.

The regulations require charities to establish anti-money laundering and antiterrorism financing systems and controls, and to provide information about these in their annual reports.

Charities would also need to appoint a compliance officer responsible for administering these systems and controls, which must enable organisations to establish the identities of donors, beneficiaries and partners, and to continually monitor those relationships.

International transactions should be identified separately from domestic ones and any suspicious transactions should be recorded and reported to the Financial Intelligence Agency.

Charity officers will also be required to disclose any previous convictions for money laundering or terrorist financing offences.

The regulations will make it an offence for charities to fail to adhere to these requirements, and penalties will be imposed.

Kim Wilson, the Shadow Minister for Health, said the Opposition supported the regulations but had concerns about the financial impact on charities of training and appointing compliance officers.

“That is going to be an added administrative cost to the charity,” she said. “There’s a number of other provisions, albeit necessary, that will equate to administrative costs, which many charities would much prefer to utilise for the purposes of providing services.”

She asked the Government whether it had considered support, such as an educational allotment, particularly for cash-strapped groups.

Ms Wilson also raised the issue of whether non-governmental organisations (NGOs), which receive money from private donors but are not charities, should be equally required to have a compliance officer and the other systems and controls recommended to protect against money laundering and terrorist financing.

Mr Richards said the Centre on Philanthropy had volunteered to assist with the training of compliance officers.

Ms Wilson responded that the Government had to provide oversight to ensure that the Centre was providing the right information regarding the requirements and international standards, which include training and record keeping.

“It’s not an easy process,” she said. “Who’s going to make sure Centre on Philanthropy is doing their job right?

“This little piece of paper, which albeit is extremely important, the regulations that are required under the Financial Action Task Force that relate to the provisions that we’re agreeing now are mammoth.”

The Centre on Philanthropy will provide information sessions and training on compliance next month, Mr Richards said.

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Published Dec 1, 2014 at 8:00 am (Updated Dec 1, 2014 at 12:36 am)

Anti-money laundering measures for charities

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