Anti-money laundering and anti terrorist financing regulations that will require businesses to better monitor their client relationships were passed by the Senate yesterday.

Senator and Attorney General Kim Wilson presented the bill which was passed in the House of Assembly on Friday evening.

Among the many steps that are taken to enhance Bermuda's reputation as a quality international business and financial services jurisdiction, was creating a criminal offence for anyone failing to comply with specific regulations.

Mrs. Wilson said yesterday that these were part of the recommendations made by the International Monetary Fund (IMF) in 2007.

"The regulations aim to limit the use of professional services for money laundering by requiring professionals and financial institutions to know their clients," she said.

"They provide administrative requirements for the anti-money laundering and antiterrorist financing regime within the regulated sector and outline the scope of customer due diligence.

"The regulated sector, referred to as "relevant persons" includes financial institutions and independent professionals ie. professional accountants and professional legal advisers.

"The regulations address a majority of the recommendations contained in the IMF 2007 Detailed Assessment Report and together with all of the legislative and operational initiatives taken to date will ensure that Bermuda is significantly compliant with international standards."

First businesses must establish and monitor the identity of the customer and any beneficial owners as well as any information about the business and the intended nature.

Should any of these regulations, which also include record-keeping and internal reporting and staff training, not be complied with they will have to cease business transactions. Failing that, the responsible parties will be held criminally liable.

UBP Senator Jeanne Atherden praised the bill saying it was absolutely necessary, but was concerned about what was reasonable diligence and due care if a third party was employed to take care of these requirements for the business.

She said the bill appeared to still target the individual or business rather then the employed professional who was responsible for the regulations. Michael Dunkley, also an opposition Senator also asked what was meant by due diligence and how was that going to be measured.

Sen. Wilson replied that the courts would be responsible for both issues — who was liable for not following the regulations and if that person had taken due care or diligence.