Bermuda Fines Meritus Trust Company $600,000 for AML and Sanctions Breaches

Meritus Trust Company has been fined $600,000 by Bermuda for breaches of anti-money laundering (AML) and sanctions compliance requirements. This marks the first sanctions-related fine issued by a British Overseas Territory in nearly a decade.

The Bermuda Monetary Authority (BMA) revealed that a regulatory inspection conducted in July 2022 identified several significant breaches. These included weak risk assessments for products, services, and customers, insufficient documentation of policies and due diligence procedures, and an over-reliance on manual processes for politically exposed persons (PEP) and sanctions screening. Additionally, the inspection found inadequate documentation of staff training on compliance matters.

The BMA required Meritus Trust Company to address these deficiencies and set a remediation deadline of July 31, 2023. In its statement, the BMA confirmed that Meritus had resolved the issues and cooperated fully during the remediation process.

A spokesperson for Meritus Trust Company stated, “Having fully addressed all inspection findings, we are well positioned for the future. We respect the BMA’s role in enforcing high compliance standards.”

The case has drawn attention from compliance observers. The ‘European Sanctions Enforcement’ blog noted, “This is a rare example of a sanctions enforcement fine being imposed in one of the UK’s overseas territories or crown dependencies. The only other example known (to this blog) are the fines and other punishments imposed in Guernsey in 2015/2016.”

This fine underscores the increasing emphasis placed on robust compliance and enforcement standards across British Overseas Territories. It serves as a notable reminder of the regulatory expectations placed on financial institutions operating in these jurisdictions.

By fLEXI tEAM