As the Observation Period by the Financial Action Task Force (FATF) came to a close on October 23rd, Cayman’s Anti Money Laundering Steering Group (AMLSG) highlighted 10 key milestones which the Cayman Islands has achieved to date. Key highlights include:
- An updated National AML/CFT Strategy 2019-2022, which was published in September 2019.
- Targeted AML/CFT risk assessments conducted in 2019 and 2020 which covered; terrorist financing, SIBL Excluded Persons (EPs), the Special Economic Zone, NPOs and the International Financial Centre.
- Officially forming the Cayman Islands Bureau of Financial Investigations (part of the Royal Cayman Islands Police Service).
- Creation of a new subscription service by the FRA which allows the receipt of sanction notices when they have been issued.
- Official AML/CFT supervision of SIBL EPs by CIMA bringing those entities fully into the local AML framework as well as a new division within CIMA focused on AML/CFT supervision.
- Enhancing the supervision of Designated Non-Financial Businesses and Professionals (DNFBPs) including attorneys, accountants and realtors, through additional guidance, sector outreach, risk assessments and onsite inspections.
- Since October 2019, company directors’ names (including alternate directors) and managing members of limited liability companies (LLC) have been publicly available from the Registrar of Companies. Since October 2020, further information including authorised share capital is also publicly available. Legislation was also updated regarding legal arrangements, formalising a trustee’s AML/CFT/CPF responsibilities and allowing government agencies, law enforcement and competent authorities the mechanism to request information from a trustee.
- A strategic analysis carried out by the FRA which improved Cayman’s understanding of the risk it faces.
A release from the AMLSG explained that the Cayman Islands is now moving into the next phase of the process, where the FATF will determine whether sufficient progress has been made and the final outcome on that regard will likely be determined in February 2021.
FTS Director Paul Byles says some of the feedback suggesting some of the measures taken have gone too far is reasonable but that the issue is also partly about reputation management which remains important.
“A lot of resources have been deployed by both the private sector and the government to ensure that the jurisdiction meets these standards. And the industry is correct to point to this as a significant burden. But in the end its also important to recognise that these initiatives have a direct impact on the reputation of the jurisdiction and that local financial services providers are negatively impacted if the jurisdiction ends up on the wrong side of any global assessments,” says Byles.