Bermuda’s Charities Amendment Act: Balancing AML/ATF standards and privacy

Bermuda’s Charities Amendment Act 2018 (Amendment Act) became operative on 10 August 2018 (Commencement Date). The Amendment Act amends the Charities Act 2014 (Act) to:

modify the conditions that Bermuda privately funded charities must satisfy in order to be exempted from the requirement to apply to be registered on Bermuda’s register of charities;

introduce notification requirements for privately funded charities that consider themselves exempt from the requirement to apply for registration under the Act; and

create a separate part of its register of charities specifically for registered privately funded charities, which is not available for inspection by the public.

Bermuda introduced these amendments in order to:

ensure that its anti-money laundering and anti-terrorist financing (AML/ATF) standards in respect of charities are kept up to date with international standards (including the Financial Action Task Force Recommendations); and

ensure that privacy concerns of registered privately funded charities are adequately respected.

Charity trustees of Bermuda privately funded charities should take steps as soon as possible to:

ascertain whether they remain exempted from the registration requirements; and

comply with the notification and, if applicable, registration requirements within the relatively tight timeframes prescribed.

Registration of charities and exemptions

The Amendment Act provides that privately funded charities are now required to meet the following conditions in order to be an Exempted Charity:

in the case of a trust, have at least one trustee licenced under the Trusts (Regulation of Trust Business) Act 2001; or

in the case of a company or other legal person, have a registered office with and be subject to compliance by a person licenced under the Corporate Service Provider Business Act 2012, with regard to applicable laws, regulations or other requirements.

Notification and transitional provisions

The Amendment Act provides that when a privately funded charity is established, the persons having the general control and management of the administration of the charity (defined in the Act as the “charity trustees”) have one month from establishment, to:

notify the Registrar of the establishment of the charity; and

provide the name of the charity, its date of establishment; and

indicate whether they believe the charity satisfies a condition to be an Exempted Charity and, if they do:

(i) specify the condition which the privately funded charity satisfies; and

(ii) supply the Registrar with the required documentation and information confirming compliance with that condition.

Charity trustees of existing privately funded charities (i.e. those established prior to the Commencement Date) that:

do not satisfy the conditions to be an Exempted Charity, have three months from the Commencement Date to apply for registration; and

believe they satisfy the conditions to be an Exempted Charity, have one month from the Commencement Date to write to the Registrar setting out the condition they satisfy.

New private part of the register of charities

Importantly, in circumstances where a privately funded charity is required to be registered, the Amendment Act expressly provides that information included on the register of charities shall:

be kept on a new separate part of the register of charities (i.e. separate from the part of the register in respect of public charities); and

not be available to the public.

The public only has the right to inspect the register of charities in respect of public charities, together with such public charities’ statements of accounts and annual reports.

Further, the Amendment Act precludes information on the part of the register designated for registered privately funded charities from being disclosed under the Public Access to Information Act 2010.