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Cayman Islands Introduces Enhanced Anti-Money Laundering Requirements

The Cayman Islands has introduced new anti-money laundering (AML) requirements for financial institutions operating in the territory. The measures aim to strengthen the country’s defenses against money laundering, terrorist financing and proliferation financing.

Internal Controls Crucial

According to the Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands, financial institutions must implement robust internal controls to prevent and detect AML/CFT/CPF risks. This includes:

• Identifying and verifying customers, including beneficial owners, controlling persons and authorized persons
• Adopting a risk-based approach to assess and determine money laundering and terrorist financing risks
• Maintaining accurate records of customer identification and transactions
• Designating an Anti-Money Laundering Compliance Officer to develop and maintain AML procedures

AML Officers Must be Appointed

Financial institutions must also appoint an officer responsible for developing and maintaining AML procedures, as well as a Money Laundering Reporting Officer (and deputy where appropriate). This ensures that institutions have the necessary expertise and resources to effectively implement AML measures.

Internal and External Reporting

In addition to these requirements, financial institutions must report suspicious activity to the relevant authorities. This includes reporting transactions that are suspected of being related to money laundering or terrorist financing. Institutions must also maintain accurate records of all transactions and customer information.

Sector-Specific Guidance

The Cayman Islands has issued sector-specific guidance for various types of institutions, including:

• Banks
• Fiduciary institutions
• Insurance businesses
• Virtual asset service providers

This guidance provides tailored AML requirements for each sector to ensure that the risks associated with each type of institution are effectively mitigated.

Conclusion

In conclusion, the Cayman Islands’ new AML requirements aim to strengthen the country’s defenses against money laundering, terrorist financing and proliferation financing. Financial institutions operating in the territory must implement robust internal controls, designate AML officers and report suspicious activity to ensure compliance with these enhanced regulations.