Members of the RISA Bermuda Committee met with representatives from the Ministry of Finance, BMA, and the National Anti-Money Laundering Committee on November 17, 2016 to discuss Government’s intention to impose a requirement for all records of a dissolved company to be retained for a minimum period of five years. Government already takes the view that the Companies Act 1981 requires retention of documents of struck off and voluntarily liquidated companies for periods of twenty and ten years, respectively. Government takes the view that the lack of any minimum document retention requirements in respect of involuntary wound up companies is a breach of the OECD and FATF guidance and will likely result in a negative outcome on the upcoming peer-review by the Global Forum on Transparency and Exchange of Information for Tax Purposes OECD (“Global Forum”).
The RISA Bermuda Committee presented practical issues that liquidators would face and provided suggestions on the implementation of the requirements, including:
- an amendment to Section 255 of the Companies Act 1981 to impose a blanket 5 year retention requirement;
- a transitional provision which only requires retention on a forward-looking basis;
- an option to apply to Court to waive the requirement where to do otherwise would be unnecessarily onerous;
- an option to retain only electronic copies of the documentation;
- a clearly-identifiable and suitably narrow scope of information to be required to be kept.
Mike Morrison and Henry Tucker from the RISA Bermuda Committee met with the Global Forum during the week of December 5, 2016 to discuss certain aspects of the proposed requirements.
A bill was approved in the House of Parliament and the Senate in February. As of February 28, 2017 it is with the Governor for signature, after which it will be gazetted.
FATF list of recommendations paragraph B10:
The RISA Bermuda Committee conducted a survey in May 2016 to seek members’ views on various areas of proposed reform. The survey results are attached.
Discussion papers have been drafted on various topics and the Committee is determining the best way forward for proposing amendments.