Bermuda will get extra powers to manage global risks posed by countries prone to money laundering and terrorist financing, under legislation debated on Friday.

The Anti-Terrorism (Financial and Other Measures) Amendment Act was put together following dialogue between the UK and Overseas Territories to ensure countries like Bermuda cannot be used as "a backdoor for certain types of undesirable and illegal activities", according to Energy Minister Michael Scott.

Mr. Scott told the House of Assembly the bill would give Bermuda the ability to direct financial firms to "undertake a graduated range of financial restrictions" on businesses connected with dubious jurisdictions.

These include places with connections to money laundering, terrorist financing and the proliferation of chemical, biological, radiological and nuclear weapons.

Government will be able to instruct firms to step up customer due diligence, carry out systemic reporting and stop doing certain transactions or entering certain business relationships.

"The integrity and good reputation of Bermuda's financial sector depends upon Bermuda's continuing commitment to keeping its financial systems, controls and regulation updated and consistent with best practices within the international arena," said Mr. Scott, who speaks on Justice matters in the House.

In the debate which followed before the bill was passed, Finance Minister Paula Cox said: "It's of paramount importance that Bermuda continues to revise and update its model."

Ms Cox also warned it is vital to avoid blindly introducing new financial regulations in the face of tough competition from rival jurisdictions.

Opposition MP Grant Gibbons asked how the Minister would exercise his powers and whether guidance would be given on which jurisdictions were deemed to be dubious.

Mr. Scott replied that the UN and the inter-governmental Financial Action Task Force on money laundering kept territories, including Bermuda, up to date on countries not complying.