Partnerships in Scope of CIMA Sanctions Regime
The Cayman Islands government has taken steps to strengthen the jurisdiction’s AML enforcement and information sharing framework, notably bringing a number of partnership vehicles into the scope of CIMA’s sanctions regime.
Through a series of legislative amendments, the measures will give CIMA the power to apply “proportionate and dissuasive sanctions” – mirroring the language of the Financial Action Task Force (FATF) Recommendations – to all types of legal persons under its supervision.
This means that CIMA’s sanctions regime, will now be extended to partnerships, exempted liability partnerships and limited liability partnerships, including the partners of these partnerships. The amendments also cover unincorporated associations other than a partnership and the persons concerned in their management or control.
These amendments come as the Cayman Islands works to overhaul its beneficial ownership and transparency legislation. A second round of industry consultation is now underway on the Beneficial Ownership Transparency Bill 2023, with the ultimate objective of being lifted from the FATF’s grey list of Jurisdictions Under Increased Monitoring at the earliest opportunity.
In total, seven separate pieces of legislation will be amended to give CIMA the power to apply sanctions for AML enforcement to the wider financial services industry, capturing all the key sectors related to AML risk. The proposed bills are: The Monetary Authority (Amendment) Bill, 2023; the Companies Management (Amendment) Bill, 2023; the Directors Registration and Licensing (Amendment) Bill, 2023; the Insurance (Amendment) Bill, 2023; the Money Services (Amendment) Bill, 2023; the Securities Investment Business (Amendment) Bill, 2023; and the Virtual Asset (Service Providers) (Amendment) Bill, 2023.
Greater powers are also to be endowed upon CIMA in the realm of information sharing and international cooperation. Additional amendments to the Monetary Authority Act will allow the regulator to spontaneously share with an overseas regulatory authority, non-public information of criminal conduct that is uncovered during the conduct of its duties.
The government stated that the clauses proposed in the Monetary Authority (Amendment) Bill, 2023, will enhance international cooperation with overseas regulatory authorities, with CIMA able to provide this information either proactively or upon request. The process of exchanging information with the local beneficial ownership competent authority will be simplified, the government said, while application of the disgorgement principle will be extended to prevent financial gain from breaching this law.
“Ultimately, they are intended to improve our AML enforcement regime, and further strengthen our local and international cooperation,” said the Minister of Financial Services and Commerce, the Hon. André Ebanks, in a statement about the legislative amendments. “This maintains the integrity of the local and international financial services industry,” he said.
