Financial Crime World

Compliance Risk Management in the Cayman Islands: A Guide for Financial Institutions

The Cayman Islands has a robust anti-money laundering (AML) regime that requires financial institutions to implement stringent measures to prevent and detect money laundering, terrorist financing, and proliferation financing. As a leading offshore financial centre, the Cayman Islands is committed to maintaining high standards of regulatory compliance.

Understanding the AML Regime

The Proceeds of Crime Act (POCA), Anti-Money Laundering Regulations, and Guidance Notes on Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands form the backbone of the AML regime. The POCA defines “relevant financial business” as activities including:

  • Acceptance of deposits
  • Money or value transfer services
  • Issuing means of payment
  • Participation in securities issues
  • Investing, administering or managing funds on behalf of others

Compliance Requirements

To comply with the AML Regime, financial institutions must:

  • Appoint an Anti-Money Laundering Compliance Officer, Money Laundering Reporting Officer and Deputy Money Laundering Reporting Officer.
  • Adopt a manual outlining procedures for:
    • Identification and verification
    • Risk management
    • Internal control
    • Reporting mechanisms
  • Train employees on AML and counter-terrorist financing procedures.
  • Maintain record keeping procedures.
  • Comply with sanction measures.
  • Collect due diligence documentation from investors and periodically review it.

The Campbells Regulatory and Compliance Services

Our team of experts has extensive experience in supporting clients to fulfill their AML/KYC obligations. Our services include:

  • Providing named individuals to act as AML Officers.
  • Preparing compliance manuals, policies, and procedures.
  • Collecting due diligence documentation from prospective investors.
  • Carrying out global sanctions and politically exposed person screening.
  • Regulatory and AML consulting.

FATCA/CRS Regime

The US Foreign Account Tax Compliance Act (FATCA) requires non-US financial institutions to report details of accounts held by US citizens or taxpayers. The Common Reporting Standard (CRS) allows tax authorities to gain a clearer understanding of financial assets held abroad by their residents.

As a Reporting Financial Institution, you must:

  • Identify the tax residency of your account holders.
  • Obtain a Global Intermediary Identification Number (GIIN).
  • Report certain information of “reportable accounts” to the Cayman Islands Department for International Tax Cooperation (DITC).

Our AEOI services include establishing and maintaining written policies, appointing AEOI officers, assisting with obtaining GIINs, registering with the DITC, collecting and validating self-certifications from investors, preparing and submitting annual CRS XML reports.

By partnering with The Campbells Regulatory and Compliance Services, you can ensure that your financial institution is compliant with the AML Regime and FATCA/CRS requirements. Our team of experts will guide you through the complexities of regulatory compliance, providing peace of mind and minimizing risks.