Cracking down on the crime of money laundering is high on Government's agenda in a bid to maintain Bermuda's reputation as a top place to do business.

That is according to Matthew Elderfield, CEO of the Bermuda Monetary Authority (BMA), who was speaking to delegates at a conference on anti-money laundering (AML) governance and compliances yesterday.

Mr. Elderfield, who was joined by US Consul General Gregory Slayton and Ron Diel of Navigant Consulting (Bermuda) Ltd., which hosted the debate, talked about the current AML efforts, and what he considered to be the high risk areas.

He said that the Island had a strong reputation on AML and a proud record of Know Your Customer (KYC - the due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their clients and find out relevant information for doing financial business with them) compliance, but added that, as a jurisdiction, Bermuda needs to be able to raise its regulatory standards.

"It shows you in terms of Government priorities how important AML is by the weight it has put on it," said Mr. Elderfield.

"There is a lot of work required from Government to try and get this package through."

Giving an update on where the BMA is at with its work on the issue, he said that a consultation paper setting out the policy changes was drawn up, while the Financial Intelligence Agency (FIA) was set up following a lengthy consultation on policy last year, with a view to submitting the legislation by the end of June to be passed in the House of Assembly.

Further down the line, Mr. Elderfield added, there were plans afoot to hold a consultative meeting with the industry before any further policy recommendations were made, and it was down to the Finance Minister Paula Cox to set a commencement date for the legislation to come into effect, expected to be at the beginning of next year.

"What we plan to do is make some specialist visits in 2009 and take a risk-based approach in terms of looking at our firms and which firms to look at," he said.

"We will get a specialist team together and choose a number of firms to look at and assess it in terms of regulations and provide feedback to the industry of what we have seen and not reach for our guns to shoot first and ask questions later.

"We will give feedback to the firms individually and to the market as a whole and give people the opportunity to learn from the experience and then go and make second round visits and at the end we may take enforcement action depending on what we see."

He said that one of the biggest challenges facing the BMA and regulators was keeping on top of individuals' and companies' ongoing monetary activity, looking at their accounts and the business flow and seeing if the activity of those accounts are consistent with the proposed business of those individuals.

Mr. Slayton, who kicked-off the meeting, talked about the importance of AML and what the US Government is doing domestically and internationally about it, including its relevance to Bermuda.

He said the US Government was stepping up its sharing of financial intelligence with its international partners, keeping up to date with what is happening on the Island and co-ordinating, co-operating and doing everything it can to help Bermuda's Government to combat the matter.

"I think it is a pretty well-run and regulated financial system here, but perhaps there are bits that need to be looked into more," he said.

"I think I know most of the top CEOs in Bermuda and there is not one that wants to be associated with a jurisidiction where money laundering is a problem, because the reputational risk is too large to their business.

"There is a reputational risk that the jurisdiction runs if it is not seen to be totally on top of these issues and you have to have the development of an AML regulation and actually utilise that regulation to put the wrongdoers in jail and prosecute offenders."

The event was wrapped up with a speech by Mr. Diel on a risk-based view of AML and Combating Financing of Terrorism (CFT), enterprise challenges and solutions and AML problem management.