Bermuda financial watchdogs have slapped a $1.5 million fine on financial services firm Sun Life Financial Investments for failing to comply with anti-money laundering and antiterrorist financing laws.

And the Bermuda Monetary Authority has banned the Hamilton-based firm from accepting or looking for any new investment business, as well as blocking any redemptions or withdrawals from existing accounts and policies unless it is vetted by an approved third party.

In addition, the BMA has halted any new payments into existing policies and accounts, while Sun Life Financial Investments will have to prove that is making “significant progress” to bring existing files up to the legal standard and to complete the work within two years.

The BMA said: “The authority considered that it was necessary to impose these restrictions to reduce the risk of money laundering/terrorist financing and because it was in the best interests of the investors.

“The restrictions will remain in place until the authority is satisfied by way of independent verification, the costs of which are to be met by the company, that the company is fully compliant with its obligations.”

The breaches were discovered during an on-site review of the company’s activities conducted by the BMA last May.

After that, the statutory process was followed, culminating in a 28-day appeal period which ended last Friday.

The decision was not appealed.

The BMA added that some of the findings represented failings of the company to adequately remediate similar findings from an on-site review conducted in 2013.

The BMA report said: “The authority views these breaches as serious because of their extent and duration, and because they demonstrated systemic weaknesses in the company’s internal AML/ATF controls. The Regulations have been in effect since 2009.

“This case highlights the importance of licensees having in place up-to-date AML/ATF policies and procedures which are appropriate, effective and fully implemented in order to avoid the risk of financial products being used as a vehicle for money laundering or terrorist financing.

“In determining the appropriate level for these civil penalties, the authority took account of the fact that in December 2015 the company closed its investment business to new sales.

“The authority also took account of the company’s full co-operation during the on-site process.

“The company has agreed to implement enhanced controls to ensure compliance in the future.”

Niall O’Hare, president, Sun Life Financial Investments, said: “We are aware of the announcement today from the Bermuda Monetary Authority regarding the closed investments business of Sun Life Financial Investments (Bermuda) Ltd. This business has been closed to new sales since January 1, 2016.”

“We are working cooperatively with the Bermuda Monetary Authority and have agreed to implement appropriate controls to ensure that we are in compliance with both the license restrictions and applicable regulations moving forward.”

“We place the highest priority on compliance with all requirements and regulations and on meeting our obligations to clients.”