How the New Anti-Money Laundering Legislation affects your property transaction in Bermuda

Article by Sharon Cranfield from Cranfields Property Bermuda Ltd. and Deputy Chair Real Estate Division - The Bermuda Chamber of Commerce

Are you a Property Buyer or Seller in Bermuda? What to expect?

Whether you are involved in a transaction to buy or sell property in Bermuda, your real estate agent will now ask you for Customer Due Diligence (CDD) information.

What does this mean if I am a seller or a buyer?

Your real estate agent/broker is now legally obliged to clearly identify you - the buyer or seller. To do this they need to obtain proof of your identity, nationality and address. Your agent/broker is required to see either a valid passport or other government issued ID document, in the presence of the holder of that document. They will then make a copy of it and certify that the copy is correct. Alternatively, if you are not able to meet face to face, you could provide a certified copy of this document. A certified copy should be signed by a professional person, noting the details of the individual certifying it, date and how to contact them. If you are a legitimate buyer or seller there is no need to be concerned when the Agent/Broker asks you for information.

Why is this happening?

Changes to Bermuda’s real estate regulations in 2017 mean that all agents and brokers must carry out CDD. Real Estate companies are now required to collect and hold this information as well as to keep it secure and confidential. In some circumstances further documentation may be required which is similar to the identifying information required by banks for their account holders. All real estate transactions now need to be compliant with Bermuda’s Anti-Money Laundering / Anti-Terrorism Financing Laws. These laws were enacted in October 2016 however the real estate industry only came into scope from November 2017. 

What other information may be requested?

You may be asked:

  • To show the source of funds used to buy the property – this would likely be from salary, inheritance or similar.
  • Whether you are a politically exposed person (PEP) i.e. related to a politician or working for one of the identified political entities.
  • To identify Trustees and Beneficial owners in the instance of a Trust
  • To identify third parties if they are involved in a transaction

Who has access to this information

The broker, agent and their compliance officer will see the information which is then kept secure and confidential for at least five years. Upon formal request the information may be shared with the Superintendent of Real Estate or an authority specified by them.

What is money laundering?

Money laundering is where criminally obtained money or assets are exchanged for ‘clean’ money, i.e. taking the proceeds from criminal activity and making them appear legal. As part of the Non-Financial Business Sector, transactions in real estate have been globally identified as a target for this illegal activity, so all relevant businesses must have appropriate anti-money laundering (AML) systems in place. 

For more details on these requirements or if you have any other AML related real estate questions please call your Broker or speak to our friendly expert at Cranfield's Property on +1 (441) 7071140

Get ready for GDPR. Considering GB is still part of Europe when this new law comes into effect at the end of May 2018, how does this affect your ability to collect and hold data on European citizens (which is probably 1/2 of Bermuda)? I would like to know who has access to this data and how is this data used and if this data is exported outside of the EU where is it going? - Posted by Kathy on 28/03/2018 4:41

Thanks for your comment, and I wish it was still this way here too!! But unfortunately everything changed on 9/11 - Posted by Mike Cranfield on 28/03/2018 10:08

I was a broker in Toronto, Canada & all of these requirements for the buyer/seller was always the obligation of the lawyer involved- the lawyer gathers all of the info mentioned. It is not the responsibility of the agent or broker to gather such confidential info. - Posted by Queenie Gay (Fubler) on 28/03/2018 12:46

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