Fintech 2025

BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen

• must identify and verify participants in the offer; • must comply with the AML/ATF requirements set out in the Digital Asset Issuance Rules 2020; and • if unable to comply with any relevant AML/ ATF Rules, are prohibited from opening an account or issuing a digital asset to any per - son and must terminate the business relation- ship. In contrast, a company that is offering shares to the public is only subject to these require - ments if it is “regulated financial institution” , as prescribed under the AML/ATF Rules. Sanctions The UK extends sanctions measures to Ber - muda by way of Overseas Territories Orders in Council ( “OT Orders” ). However, not all OT Orders extend to Bermuda (owing to policy rea - sons) and are therefore brought into force under the International Sanctions Act 2003 (ISA). The Bermuda sanctions regulatory regime applies to all individuals and legal entities who are within or who undertake activities within Ber - muda. OT Orders have a broad reach and apply to persons in Bermuda, as well as to any person not in Bermuda but who is a British citizen, a citizen of a British overseas territory, a British subject, an overseas British national or a British protected person ordinarily resident in Bermuda. Any person on board of a ship or aircraft that is registered in Bermuda is also caught by financial sanctions. As “regulated financial institutions” , DABA licen - sees have an obligation to report to Bermuda’s Financial Sanctions Implementation Unit as soon

as practicable if they know – or have reasonable cause to suspect – that a person: • is a designated or listed person; or • has committed an offence under the licens - ing, contravention or circumvention provi - sions of the sanctions. DABA licensees are also required to: • establish and maintain risk-sensitive policies and procedures that include: (a) the application of customer due diligence (enhanced customer due diligence is required where a person or a transaction is from or in a country subject to interna - tional sanctions); (b) ongoing monitoring of the customer rela - tionship; and (c) maintaining adequate records of their customers and their business activities against sanctions lists applicable to Ber - muda; and • maintain records for any potential matches to names and sanctions lists, whether the match turns out to be true or a false positive. If a DABA licensee has outsourced this function to a service provider, steps should be taken to verify that the service provider is also fully com - pliant with the Bermuda sanctions regime, as ultimate responsibility for compliance remains with the DABA licensee. Anti-Bribery Under Bermuda’s Bribery Act 2016, the following offences are applicable to both individuals and corporations: • an offence of bribing (offering, promising or giving a financial or other advantage);

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