Bermuda: Money Laundering Regulations "Could Put Businesses On Wrong Side Of The Law"

Royal Gazette

23 August 2000

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

Financial experts and businesses could find themselves on the wrong side of the law under new regulations passed in the House of Assembly Friday night, it has been claimed.

Opposition MP and Shadow Legislative Affairs MP John Barritt said changes to the Proceeds of Crime Act, which will allow police to investigate any allegations of money laundering, no matter how long ago it took place, had already caused concern in Bermuda.

Previously, police had only been allowed to actively investigate such crimes that had occurred within the last three years.

But Mr. Barritt said some people working with trust funds and banking may find that they inadvertently overstepped the line years back, even though they believed they were acting within the law.

He said: "If you open it up so there is no limitation, you are saying to these people in Bermuda that they have to have due diligence going way back.

"This is going to cause, and is causing, great concern to people in the trust companies.

"If three years was too short, what about seven? Why all of a sudden is it unlimited?"

The opposition has demanded to know whether the changes to the Proceeds of Crime Act have come about because of the agreement Bermuda made with the OECD in June to save itself from being labelled as a harmful tax jurisdiction.

The UBP has repeatedly called for the details of the agreement, which may have safeguarded Bermuda against being threatened by sanctions, to be made public.

Banker and Opposition Whip Cole Simons added his voice to the call for time limits on the confiscation of money, suggesting that "a certain family in the US" if they invested in Bermuda might have their riches taken away.

"I'm sorry, but we have to put a time limit on this," Mr. Simons said. "As procedure, it's impossible for us to go back 100 years. The reality is we cannot have retroactive legislation.

"This threatens Bermuda's competitive position and it sends the message that we're not on the cutting edge," he added. But Finance Minister Eugene Cox called Opposition complaints "untruths" and "absolutely errant nonsense".

Mr. Cox said independent legal advice and the Attorney General's chamber's advice had approved the clause and "to suggest otherwise is a misreading of the Act".

"What is happening in Bermuda is we have been sitting down with representatives and people from various groups and we discuss things with them. What we're finding out is the information is not being taken back and disseminated. I'm not going around and babysitting everybody."

Shadow Finance Minister Grant Gibbons said the US has a "statute of limitations" on how long into the future a prosecution can take place and he suggested there was no consultation with business leaders. "Clearly we're not in conformity with the US our biggest trading partner, clearly we're not in conformity with the wider world," he added.

But Attorney General and Government MP Dame Lois Browne-Evans was adamant that the amendment was the right path to take.

She asked why should white collar criminals, who make money out of money laundering, be treated any differently to the common criminal.

She added: "If the evidence is left and is still there, then you can be prosecuted for it."

Also passed as part of the amendment to the Act on Friday night was the establishing of a fund, known as the Confiscated Assets Fund, where all proceeds and assets from the prosecution of drugs cases will be placed.

It means the drugs cash will no longer be placed in a consolidated fund as before, but in its own account which will be solely used to help re-habilitate drug addicts. The new fund will allow Bermuda to share, particularly with America, in any assets that have been retrieved from drug deals where Bermuda has been directly involved.

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