Finance Minister Paula Cox yesterday said the Government intends to use recommendations made by the International Monetary Fund (IMF) as a roadmap for enhancements to Bermuda's anti-money laudering regime.

In a press conference yesterday, Ms Cox added that further legislation was in the pipeline, including giving financial regulator the Bermuda Monetary Authority (the BMA) more teeth in the enforcement of Proceeds of Crime (POC) legislation.

Ms Cox added that several amendments to the law made last year had already gone some way to addressing the weaknesses identified in the Island's anti-money laundering/combatting the finance of terrorism (AML/CFT) regime.

She cautioned that there was a need "to avoid needless or damaging over-regulation" and added: " I believe that the IMF assessment provides a very strong endorsement of the line that the Government has steadfastly pursued."

Attorney General and Minister of Justice Kim Wilson also announced that she was working towards producing a legislative package to comply with the report's recommendations that she hoped could be presented to Parliament by the summer session.

The Ministers were speaking after the release of the IMF's Detailed Assessment Report on Bermuda's AML/CFT regime, which criticised the Island's authorities for having been slow to implement recommendations made in a previous IMF report in 2003. it also suggested more staff were needed by the Police and the DPP's office to fight effectively against money laundering.

"Bermuda has long had a reputation as one of the world's premier centres for international business and financial services and our regulation, business practices and legal framework have long provided significant impediments to illicit, unethical and sharp business dealings," Ms Cox said.

"Equally the authorities recognise the need to enhance and accelerate Bermuda's current efforts to strengthen the existing AML/CFT regime including the visible reflection of the standards in business systems and processes in the financial sector.

"The Government intends to use the recommendation emanating from the report to provide a roadmap for the various enhancements to the AML/CFT regime in Bermuda both in the public and private sector. Some of the required changes are already in place and many are at an advanced stage of implementation. Still others are currently the subject of further consultation among those concerned both in the public and private sectors as the to-do list is moved through in a risk-prioritised manner."

Since last May's visit by IMF assessors, talks between the National Anti-Money Laundering Committee and industry had led to a consultative paper proposing a further Proceeds of Crime Amendment Bill this year.

Among legisltaive changes proposed are:

• The scope of draft AML regulations will be enlarged to include due diligence requirements and record keeping with respect to the financing of terrorism activities.

• Enhancing the powers of the BMA. For the avoidance of doubt, the BMA will explicitly be given responsibility for both compliance and enforcement of the POC regulations. The objects of the Authority as stated in the Bermuda Monetary Authority Act 1969 will therefore be further amended to include responsibility for compliance and enforcement of the regulations.

• Bringing within the scope of the AML regulations, financial institutions otherwise exempted from licensing requirements. This will mean that compliance with the customer due diligence requirements in relation to money laundering and terrorist financing will be applied to all financial institutions operating in and from Bermuda.

• Designating self-regulatory organisations (SROs). Independent professionals will now be required to be in compliance with the regulations. Amending the POCA to enable the Minister to designate SROs to oversee the compliance and enforcement of AML/CFT standards for independent professionals would enable professional bodies such as the Institute of Chartered Accountants of Bermuda and the Bermuda Bar Association to potentially take on oversight and enforcement responsibility as SROs. In order to be designated, a supervisory body must demonstrate that they have the ability and willingness to fulfill the responsibilities effectively.

• The authorities are reviewing how best to address the regulation of other sectors which are expected to be in scope including corporate service providers, real estate agents and retailers of high value goods.

• Reviewing the laws and regulations related to charities to minimise the risk of potential abuse.

Ms Cox said, as a jurisdiction, "Bermuda has nothing to be ahsamed of" and that the planned public-private sector reforms would "ensure that Bermuda's financial sector meets its obligations while maintaining Bermuda's competitive position in the provision of premier financial services".

"This Government has been acutely aware from the outset of the critical need to continue to strike a careful balance in our regulatory regime - to make it effective but always appropriate," Ms Cox added.

"We want an effective and an efficient system of regulation. Accordingly, we need to have full regard to the sophistication of Bermuda's financial services sector and of the participants in them. This also means that we need to avoid needless or damaging over-regulation, which can too easily result in a world in which standards are being constantly enhanced and reinforced to meet new risks and threats."

Sen. Wilson added that the Financial Intelligence Agency (FIA) board, chaired by former Police Superintendent Sinclair White, had already had an initial meeting with a view to appointing a director and other employees. The FIA was founded as an entity to process and evaluate suspicious activity reports (SARs) and to pass on cases worthy of investigation to the Police's FIU.

"Considerable work has also been done to date on the proposed changes to legislation which are still required to ensure compliance with the Financial Action Task Force (FATF) recommendations," Sen. Wilson added.

Regulatory models in four other jurisdictions were being evaluated to help develop the new regime and the team was consulting with the BMA, the Bermuda Bar Council and Institute of Chartered Accountants of Bermuda to ensure a cost-effective and fair solution, she added.

"We will utilise all of this information to develop a comprehensive legislative package to be presented to Parliament in the summer session and enacted as as possible thereafter," Sen. Wilson said. "We are certainly pleased that good progress is being made on all of the highlighted initiatives and anticipate that we will be able to meet the commitments made to CFATF in November."