A Bill giving Bermuda Monetary Authority power to fine companies up to $500,000 for breaking financial regulations was debated in the House of Assembly yesterday.

All financial institutions will be supervised by BMA as part of the Proceeds of Crime Regulations (Supervisory and Enforcement) Act 2008, which was given its second reading by Junior Justice Minister Michael Scott.

Mr. Scott said it would mean BMA could cancel the registration of a non-licensed financial institution if the registration is false or misleading, or if regulations are breached.

BMA would also have the power to enter the premises of regulated financial institutions to observe the carrying on of business and inspect documents, and would have a duty to compile and maintain a register of financial institutions.

The Act also sets up an Appeals Tribunal for companies which feel they have been unfairly punished.

"There can be no doubting the Bermuda Government's commitment to fulfilling all its objectives to be significantly compliant with the FATF (Financial Action Task Force) requirements," Mr. Scott told the House.

"The commitment is evidenced by the tremendous progress made to date since the 2007 IMF (International Monetary Fund) review; the recent commencement of relevant legislation; and the Bill presented before this Honourable House today.

"It would be remiss not to applaud the various individuals, agencies and stakeholders who have made invaluable contributions to the achievement of Government's objective for substantial compliance with international standards, critical to the preservation and enhancement of Bermuda's reputation as a quality international business and financial services jurisdictions."

Shadow Justice Minister Mark Pettingill said he supported the concept of ensuring Bermuda continues its efforts to be a 'Rolls-Royce' of the industry.

But he said elements of the Act were too open-ended by implying that the Minister "may" take action in certain instances, rather than "shall" take action.

Shadow Finance Minister Bob Richards said arguing against the Bill would be like making a case against mama and apple pie, but warned that jumping through increasing numbers of hoops at the request of international authorities could one day spell trouble.

"Eventually, there will be a point where we jump through a fatal hoop," said Mr. Richards. "There's a point where you can regulate yourselves into a position where you are no longer competitive. Hopefully that day will never come."

Mr. Richards said it would be interesting to see how international money laundering regulations relate to under-investigation Progressive Labour Party branch chairman Andre Curtis, who is alleged to have taken part in a worldwide scam said to have left victims more than $1 million out of pocket.

Cole Simons of the Opposition, who works in international business for HSBC, said Government should help consumers who lose out by unknowingly dealing with dubious companies.

Mr. Simons also suggested fines should go into the Government coffers instead of to BMA.

Finance Minister Paula Cox acknowledged letting the cash go to BMA could be precedent-setting, and assured BMA must be transparent as to how the money is spent.

Former United Bermuda Party Finance Minister Grant Gibbons asked: "Will the Ministry be expecting various professional bodies (eg. law and accountancy firms) to have folk on staff capable of doing this individual monitoring?"

Mr. Scott said: "Yes, this is the expectation."

Dr. Gibbons said money laundering also took place through jewellery and watch purchases. He said: "In Bermuda there are a lot of entrepreneurs who have established storefronts, but we also know there are people who go abroad and import stuff for people such as jewellery, and launder money that way.

"Is the BMA going to have to go out and track them down? How is that regulation process going to happen? It sounds like the BMA will have to spend a lot of time policing this stuff."

He also asked: "Am I right in thinking fees have now been set for licensed financial institutions? What are the annual fees?"

Ms Cox said there would not be an additional fee for anti-money laundering.

Mr. Scott added: "There is no separate fee for licensed entities. They are the same."

MPs passed the Act without any amendments.