Anti-Money Laundering (AML) Compliance in the Cayman Islands

The Cayman Islands has a robust Anti-Money Laundering (AML) framework in place to combat money laundering, terrorist financing, and proliferation financing. Here are the key points related to AML compliance in the Cayman Islands:

Definition of Relevant Financial Business

• The Cayman Islands Anti-Money Laundering Regulations define “relevant financial business” as activities such as:
  • Banking or trust business carried on by a licensed person
  • Acceptance of deposits by a building society
  • Business carried on by a co-operative society
  • Insurance business
  • Mutual fund administration
  • Company management business

AML Requirements for Covered Institutions

• Financial services providers must maintain AML/CFT/CPF procedures, including:
  • Identification and verification of customers
  • Adoption of a risk-based approach
  • Record keeping
  • Internal controls
  • Designation of an Anti-Money Laundering Compliance Officer
  • Reporting of suspicious activity
  • Risk-screening of employees
  • Training employees

Different AML Compliance Requirements for Different Types of Institutions

• The requirements for different institutions can vary slightly due to sector-specific guidance provided in the Guidance Notes for:
  • Banks
  • Fiduciary institutions
  • Insurance businesses
  • Mutual funds
  • Money services business
  • Securities investment business
  • Virtual asset service providers

Digital Assets Subject to AML Rules

• Virtual Asset Service Providers (VASPs) must comply with the Regulations and other laws relating to combating money laundering, terrorist financing, and proliferation financing.

The Cayman Islands’ AML framework is designed to be risk-based, meaning that institutions are required to implement procedures based on their specific risks. The framework also includes sector-specific guidance for different types of institutions to ensure that they meet their unique compliance requirements.

If you have any further questions or need more information, please don’t hesitate to ask!