The Government has called for feedback on beneficial ownership legislation, including the transfer of the central register from the Bermuda Monetary Authority to the Registrar of Companies.

Its consultation document said proposals were designed to enhance Bermuda’s beneficial ownership regime by consolidating it under the framework of one Act, in accordance with a revised Financial Action Task Force recommendation.

It is proposed to extend access to the register to obliged entities [financial institutions and designated non-financial business persons] as well as those who can demonstrate a legitimate interest.

The deadline for submissions is January 8.

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Consultation Paper Central Register of Beneficial Ownership Information of Legal Persons

The consultation document, sent out yesterday, said: “The Government is now considering streamlining its beneficial ownership regulatory regime in order to maximise efficiencies, ease administration and maintain compliance.

“To give effect to this proposal, Bermuda’s central register of beneficial ownership information therefore would be transferred from the BMA to the RoC, with the RoC designated as the authority to collect, verify and maintain on the central register beneficial ownership information on legal persons operating from and within Bermuda.”

The RoC has developed a secure database on which the register will be held.

The consultation follows the Bermuda Government's public commitment in July 2020 to bring forward proposals to establish public access to beneficial ownership information on companies held on its central register. The pledge was to do so within a year of the European Union publication of an Implementation Review of the Fifth Anti-Money Laundering Directive.

In November 2022, the Court of Justice of the European Union found that an EU requirement to implement publicly accessible registers was contrary to the EU Charter of Fundamental Rights.

While this does not apply to Britain’s Overseas Territories, several of them expressed concerns about the legal implications of implementing a publicly accessible register if human rights provisions applicable to them were to be interpreted in a similar way.

Britain maintained the lawfulness of its own register and the ability of territories to meet the requirements of the draft Order in Council.

As a result, an interim step was agreed upon.

David Rutley, Britain’s Parliamentary Under Secretary of State for the Americas, Caribbean and the Overseas Territories, said in a written statement in the House of Commons last December: “Given our differing views on this ruling with several Overseas Territories, we have worked with them to find a way to make positive progress through the delivery of an interim step, which would involve the implementation of publicly accessible registers of beneficial ownership, with a legitimate interest access filter, next year.

“This would allow access to beneficial ownership information by members of the public who have a legitimate interest in doing so, including media and civil society organisations who are involved in the fight against illicit finance and money laundering.”

That was with a view to implementation of a full register “in due course”.

As a result of the ECJ ruling, on June 19, the EU published its Sixth Anti-Money Laundering Directive [EU 6AMLD] requiring that access by the public to beneficial ownership information held on the central registers of EU member states be made conditional on the demonstration of a legitimate interest.

A notice from the Ministry of Finance’s Registrar of Companies Department said: “The Government of Bermuda is also aware that the right to protection of personal data is further guaranteed by the right to respect for private life under the European Convention on Human Rights, which has been extended by the UK Government to most OTs, including Bermuda.”

The consultation sets out a phased approach to extending access to those with legitimate interest by the third quarter of 2026.

The Government said it would extend access to obliged entities by the second quarter of 2025 and to persons with a legitimate interest by the third quarter of 2026.

Its consultation also seeks to make sure that Bermuda satisfies its further obligations under the revised FATF international standards on beneficial ownership and transparency, and addresses any key recommended actions identified by the Caribbean Financial Task Force as part of Bermuda’s fourth-round mutual evaluation.

The Government would repeal several legislative provisions in the process of introducing a single Act to govern the island’s regime, including within the Companies Act 1981 and related Acts, and the Exchange Control Regulations 1973.

The new Act is expected to be in place by the first quarter of next year and the regulations governing, in the first instance, access to obliged entities, by the second quarter of 2025.

The RoC would have the power to restrict or prohibit access to the beneficial ownership information held as considered appropriate.

A criminal sanction would be placed on disclosure of beneficial ownership information to unauthorised entities and there will be requirements in place through the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 to require obliged entities to report any material discrepancy between the information they hold and that on the central register.

The proposed penalty for breach of improper disclosure is a fine not exceeding $50,000 or two years’ imprisonment, or both, on summary conviction.

Failure to comply with beneficial ownership requirements would fetch a fine not exceeding $250,000.

A fine of $25,000 or two years’ imprisonment is proposed for making false or misleading statements.

Bermuda also intends to include public authorities at a national level in the scope of competent authorities that have access to central register of beneficial ownership information, as well as “others as appropriate” in the course of public procurement.

The Government said: “Access to the central register, therefore, will be extended to the Office of Project Management and Procurement, and government ministries and departments engaged in the procurement process for the purposes of facilitating the exercise of their due diligence functions.”

The Government said in the absence of an international standard and evidence-based practices to guide development and implementation, its goal is to balance competing public and private interests at stake.

In conclusion, the consultation document said: “As the jurisdiction now progresses towards a beneficial ownership register of companies accessible to obliged entities and persons that can demonstrate a legitimate interest having regard to the EU 6AMLD and international best practice, the Government will continue to monitor global developments as it aims to strike a balance between greater transparency and the individual rights to privacy and data protection.”

• Feedback can be submitted to the Regulatory, Enforcement and Policy Division, Registrar of Companies Department, by e-mail at rocpolicy@gov.bm by January 8, 2025. To read the full consultation document, see Related Media