Bermuda Meeting Examines Role Of Compliance Officer

by Sue Stuart, Bermuda Royal Gazette

18 April 2001

This story is reproduced by kind permission of the Royal Gazette at: http://www.accessbda.bm

Money launderers are becoming so sohisticated that they are capable of exploiting almost any kind of banking transaction.

That is the major point that will be made to the Association of Bermuda Compliance Officers by Owen Reid, the association's chairman and co-founder, at a meeting on April 24.

Following implementation of the Proceeds of Crime (money laundering) Regulations 1998 the role of compliance officer has become even more prominent.

All regulated institutions in Bermuda are required by law to appoint a reporting officer, who will report suspicions of money laundering to the relevant authority, and to train staff at all levels in vigilance procedures.

The association, which is open to all those involved in compliance and anti-money laundering procedures, aims to keep its members fully abreast of current requirements and procedures. It also assists with training opportunities and guidance.

Mr. Reid, who will be the speaker at the meeting on April 24, will tell attendees: "It is difficult to precisely define a suspicious transaction. In general terms however, a suspicious transaction will often be one that is inconsistent with a customer's known, legitimate business or personal activities, or with the normal business for that type of account."

In defining the role of the compliance/reporting officer he said an important responsibility is to receive reports of suspicions from individual employees in the institution. "Suspicious behaviour is cumulative. Where a single unusual occurrence might not cause any special notice, the repeated occurrence of events which are inconsistent with a customer's stated business become increasingly suspect," he said.

The reporting officer must then determine whether the reported suspicion is well founded in the light of all other relevant information. "In making this judgment they should consider all other relevant information available within their institutions concerning the person or business to whom the initial report relates.

"This may include making a review of other transaction patterns and volumes through the account or accounts in the same name, the length of the business relationship, and referral to identification records held," said Mr. Reid.

The reporting officer is responsible for passing reports of suspicious transactions to the Island's Financial Investigation Unit - FIU.

This is a separate section within the Bermuda Police Service set up to administer provisions of the relevant legislation. In his paper Mr. Reid points out the importance of ensuring all possible enquiries have been made before passing a report to the FIU.

The reporting officer must, "provide a reminder of the obligation to the reporting employee to do nothing that might prejudice any inquiry by the FIU, such as tipping off (the customer)," he said. And all decisions should be recorded in writing.

It is the responsibility of the compliance/reporting officer to ensure his or her institution has a solid compliance regime. "It has been widely recognised that the implementation of a well-designed, applied and monitored compliance regime is a `good business practice' as it provides a solid foundation for ensuring/measuring a regulated institution's ongoing compliance with the regulations,"said Mr. Reid.

He hopes the meeting will attract more members to the association, as the need for compliance officers to be constantly updated is growing. Anyone wishing to attend can contact the chairman call 299-6753 before April 20 to reserve a place.

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