As per the POCA Regulations, businesses must apply enhanced customer due diligence in cases where transactions or clients are tied to jurisdictions identified as high-risk. This requirement is rooted in two key provisions:

• Regulation 11(1)(aa): EDD must be applied to business relationships where a person or a transaction is from or in a country flagged by the Financial Action Task Force (FATF) or its regional bodies as high-risk.
• Regulation 11(1)(ab): EDD is necessary where a person or transaction is from or in a country which represents a higher risk of money laundering, corruption, terrorist financing, or international sanctions.

FATF, as the global standard-setter for anti-money laundering (AML) and counter-terrorist financing (CFT), routinely publishes updates on countries with inadequate controls. The February 2025 FATF Public Statements identify jurisdictions requiring heightened scrutiny.

• High-Risk Jurisdictions (Black List): Countries posing serious risks, such as North Korea, Iran, and Myanmar. Apply counter measures and EDD measures in accordance with the risk.
• Jurisdictions under increased monitoring (Grey List): Nations actively working to improve but still falling short, including Algeria, Nigeria, and South Africa. Take appropriate actions to minimise the associated risks, which may include EDD measures in high risk situations.

The advisory reminds entities to consult these FATF assessments regularly to guide their risk-based approach and take appropriate steps to reduce exposure.

The advisory points to a list of jurisdictions requiring EDD, which includes countries like Kenya, Vietnam, Syria, and Yemen, among others. Special focus is placed on jurisdictions where international sanctions are also in effect, demanding additional compliance measures as outlined in the International Sanctions Regulations 2013.

Financial institutions and regulated entities must:

• Assess the risks linked to these jurisdictions diligently.
• Implement robust EDD processes for high-risk cases.
• Consider FATF’s findings and incorporate these into their compliance strategies to safeguard against financial crime.

This advisory supersedes previous notices and reiterates Bermuda's commitment to upholding global AML/CFT standards. For further details, the Ministerial Advisory 1-2025 can be found here and the FATF statements here and here.