Financial Crime World

Cayman Islands Compliance Officer Responsibilities: A Complex Landscape

In an effort to combat money laundering, terrorist financing, and proliferation financing, the Cayman Islands has implemented a comprehensive anti-money laundering (AML) regime. Financial Service Providers (FSPs) operating in the region are required to appoint dedicated compliance officers, including an Anti-Money Laundering Compliance Officer (AMLCO), Money Laundering Reporting Officer (MLRO), and Deputy Money Laundering Reporting Officer (DMLRO).

The Role of the AMLCO

At the helm of AML compliance is the AMLCO, a senior-level official responsible for overseeing the effectiveness of FSPs’ anti-money laundering/countering the financing of terrorism (AML/CFT) systems. The AMLCO must have sufficient skills and experience to ensure that the FSP’s policies and procedures are in line with evolving regulatory requirements.

Key Responsibilities of the AMLCO

  • Developing and Maintaining Systems and Controls: Developing and maintaining systems and controls, including documented policies and procedures
  • Regular Audits: Ensuring regular audits of the AML/CFT program
  • Maintaining Logs: Maintaining various logs, as necessary, including those related to declined business, politically exposed persons (PEPs), and requests from competent authorities
  • Advising the Board: Advising the Board on AML/CFT compliance issues that require attention
  • Reporting: Reporting periodically to the Board or Board committees on the FSP’s systems and controls
  • Responding to Requests: Responding promptly to requests for information from relevant competent authorities

The Role of the MLRO and DMLRO

The MLRO, a management-level official, is responsible for receiving and processing suspicious activity reports (SARs) from staff. The DMLRO, a staff member of similar status and experience to the MLRO, shall discharge the MLRO functions in their absence.

Delegation and Outsourcing

FSPs are permitted to delegate or outsource certain AML obligations, but must ensure that access to data is not impeded by confidentiality, secrecy, privacy, or data protection restrictions. Failure to comply with these responsibilities can result in personal liability for AML officers and reputational damage to the entities they serve.

The Cayman Islands’ anti-money laundering regime is complex and requires AML officers to understand and carry out their roles in accordance with the requirements set out in the regime. It is essential that FSPs seek appropriate legal advice to ensure compliance with these regulations.

Expertise at Stuarts Law Firm

In this challenging regulatory environment, Stuarts Investment Funds and Regulatory teams have extensive experience advising funds and other regulated entities on corporate governance and compliance matters. Our team of experienced professionals can provide a full suite of corporate governance and directorship services to assist in meeting the ongoing regulatory obligations of your fund or regulated entity in the Cayman Islands.

Get in Touch

For more information, please contact Chris Humphries or Jonathan McLean at Stuarts Law Firm.