A trio of Bills to crack down on money laundering and terrorism were yesterday approved in the Senate.

The Proceeds of Crime Amendment Act 2007, The Criminal Justice (International Co-operation) (Bermuda) Amendment Act 2007, and The Financial Intelligence Agency Act 2007 were all passed with cross-party support on their second reading.

However the third Bill, The Financial Intelligence Agency Act, will be sent back to the House of Representatives for approval of an amendment before becoming law.

Presented in the Senate by Attorney General Sen. Philip Perinchief, The Proceeds of Crime Amendment Act was praised by Sen. Bob Richards of the UBP.

He said: “Our party has a very strong support of this Act and the original Proceeds of Crime Act. The world is a complicated and dangerous place today and we have to make sure we keep up with international criminals and terrorists.

“It would be a wonderful thing if we did not have to pass this sort of legislation but it is necessary and it is something we have to do to keep up with our reputation as a first-rate international centre. So, we support this and the improvements it is going to make.”

The Proceeds of Crime Amendment Act tightens up the monitoring of financial transactions, extending the scope of jurisdiction to accountants, lawyers and other professionals, to make them responsible for reporting suspicions of money-laundering by clients.

It extends the use of production orders and search warrants into customer information orders, plus the freezing of funds for up to a week. Failure to comply brings a penalty of $50,000, or $100,000 for making a false statement.

Sen. Richards argued that under the freezing of funds, more attention should be given to securities. “It seems to me if I had my hat on as a money launderer, my first reaction would be this is a big loophole — I don’t have to use bank accounts, I can use securities,” he said.

“I wonder if we are being too focused here by seeing a means by bank accounts, because there is more than a trillion dollars out there which does not account for bank accounts. I would love to be informed that I am wrong because we are all in support of the amendment but if I am right, this is a loophole.”

Sen. Walwyn Hughes said: “These Bills are very, very important”. However, he said he was concerned money launderers would target estate agents.

Sen. Perinchief said: “I’m informed that real estate agents are not under the scope as yet. We will be looking at bringing those under the scope. It’s certainly frugal and we will certainly address it.”

The Bill states the buying and selling of real estate is under its jurisdiction. The Government also aims to cover security accounts as well as bank savings and other transactions under the Act.

The Senate also approved the Criminal Justice (International Co-operation) (Bermuda) Amendment Act, which allows for the search and seizure of evidence for foreign criminal proceedings, under prior approval of the Attorney General.

The Financial Intelligence Agency Act was also passed. This endorses an FIA to analyse reports of suspicious activity and to freeze funds at financial institutions for up to three days.

The FIA will be able to serve notice for information on any person, under penalty of $10,000 or six months in jail for non-compliance. Suspicious information is then passed on to the Financial Intelligence Unit of the Police Service, or overseas authorities.

An independent body, the FIA will focus on money laundering and suspected terrorist activity. It comes under the control of the Minister of Justice and will consist of a director, who is a CEO; an attorney; accountant; senior analyst; junior analyst; and an administrative assistant.

The budget for the first year is $540,000. Sen. Richards said he was concerned the FIA would only add to the Government’s bureaucracy.

“It seems to me all this could be done within a little department within the BMA,” he said. “To have the whole mechanism and structure of another quango, it just doesn’t seem to be an efficient way of going about this.”

He said: “We’re creating pyramids of bureaucracies around the world with these organisations, but how effective are they in stifling money laundering? It seems we’re spending more of taxpayers’ money here and we deserve to have this question answered, whether this money is being spent effectively and are we going to catch the criminals at large?”

Sen. Hughes commented: “If you set this FIA up, it must be independent. It’s essential that the board must be professional people.”

Sen. David Burch, Minister for Public Safety and Housing, stressed the global importance of setting up the FIA.

“We have to operate in line with international best practice, and we have to have an agency that stands separate from any Government influence to manage financial investigations,” he added.

Sen. Perinchief said that Bermuda had to meet its “international obligations” but it did not necessarily have to “slavishly follow all of the international rules and regulations”.

“We should customise the regulations without running afoul of the international justices,” he said.

“Although we’ve been slow, I believe we’ve run and have now caught up. Bermuda is now on line and is moving forward.”

The Senate approved the Act but asked for an amendment to the wording in relation to the FIA’s Board, so that it now reads: “In appointing the non-executive members of the Board, the Minister shall ensure that the Board shall have persons who in the Minister’s opinion have broad experience and expertise in law enforcement, the law, financial services and financial regulation.” The amendment is to make sure every FIA Board member is a qualified expert. It now awaits the approval of the House of Representatives.

Senate approves money laundering crackdown