Financial Crime World

Anti-Money Laundering Measures for Cayman Islands Funds

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Introduction

This is a guidance note prepared by Stuarts Humphries, a leading Cayman Islands legal practice with international reach. The note provides essential information on the key requirements and procedures that a Fund must implement to comply with Anti-Money Laundering (AML) regulations in the Cayman Islands.

Key Requirements and Procedures

1. Customer Due Diligence

  • Conduct due diligence on customers, including:
    • Identifying and verifying their identity
    • Understanding the purpose of the business relationship
    • Conducting ongoing due diligence

2. Risk Management

  • Adopt a risk-based approach to identify, assess, and understand money laundering and terrorist financing risks in relation to customers, products, services, transactions, and delivery channels.

3. Screening Employees

  • Screen prospective and current employees to ensure high standards.

4. Record-Keeping Procedures

  • Keep records and logs related to business relationships and customers, including:
    • Customer due diligence information
    • Transaction records

5. Sanctions Compliance

  • Maintain systems to identify risk in relation to persons, countries, and activities subject to sanctions.

6. Training of Employees

  • Provide training to employees on AML procedures and the recognition and treatment of transactions carried out by or on behalf of individuals engaged in money laundering.

Ensuring Compliance

To ensure compliance with these measures, a Fund can:

  • Review existing customer identification/KYC procedures
  • Appoint required officers (Compliance Officer, MLRO, and Deputy MLRO)
  • Adopt and maintain various policies and logs (AML manual, competent authority enquiries log, complaints log, declined business log, SAR log, and PEP log)
  • Engage a service provider to ensure compliance with AML measures

Important Notes

  • This guidance note is intended for general information purposes only.
  • Specialist advice should be sought about specific circumstances.

Contact Us

For more information or specific legal advice, please contact:

  • Chris Humphries (Managing Director)
  • Jonathan McLean (Partner)
  • Megan Wright (Partner)

Stuarts Humphries A leading Cayman Islands legal practice with international reach.