Bermuda's money laundering and wire transfer laws will soon be updated to be on par with the rest of the world.

And the Bermuda Monetary Authority will have more power to oversee wire transfers under legislation presented to the House of Assembly.

Financial institutions will be required to step up their oversight of wire transfers under this new legislation put before the House of Assembly yesterday by Junior Minister of Justice, Michael Scott.

He said: "Mr. Speaker, recognising the importance of protecting the global financial system from abuse by money launderers and those promoting and assisting terrorism, the Government of Bermuda as noted previously, has fully committed to the action plan to bring Bermuda's already strict controls into closer alignment with the FAFT requirements.

"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."

The new regulations with include:

—Require financial institutions to verify the accuracy of the information on the payer/originator before transfering the finds, using documents/data from a reliable source

—Require financial institutions to retain for a period of five years, records of complete information on the payer/originator of the fund transfer

—Require financial institutions which at the recipients of wire transfers to maintain effective procedures to detect whether complete information on the payer/originator is received along with the wire transfer

—Specify how the receiving financial institutions ought to treat transfers with missing or incomplete information and also how to treat the payer institutions which repeatedly fail to provide complete information.

These options will range from rejection to transfer to the issuance of warnings and deadlines to the termination of business dealings

Mr. Scott also read out yesterday's draft order, which is part of ongoing efforts to improve the Island's anti-money laundering and antiterrorism measures. Under regulations passed last year,

"The proposed new Proceeds of Crime Amendment Regulations 2009 will impose on AML/ATF regulated financial institutions requirements in relation to the provision of wire transfer services.

"These new requirements, by virtue of the Minister's Order, and being brought under the scope of the supervisory and enforcement regime of the BMA which is enshrined in the Proceeds of Crime Regulations Act 2008, specifically section 20."

"By this process effective, proportionate and dissuasive civil sanctions are being made available to the BMA to address breaches by financial institutions of those proposed new Regulations, which the Order will include in the list of provisions specified in section 20 of the Act."

The BMA has to power to:

—Require payer information to accompany wire transfers

—Require verification of payer information in wire transfers

—Prescribing requirements for detection of missing or incomplete payer information re wire transfers

—Imposing requirements on intermediaries to keep payer information with the wire transfers.