Financial Crime World

Title: Cayman Islands Strengthens Anti-Money Laundering and Counter-Terrorist Financing Measures with New Strategy

Introduction

The Cayman Islands, a leading international financial hub, has released a new Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) strategy for the period 2019-2022. This strategy outlines the jurisdiction’s efforts to strengthen its legal framework and operational capabilities against financial crimes.

Unveiling the Strategy

The strategy was unveiled by the Honorable Premier Alden McLaughlin and the Honorable Attorney General Samuel Bulgin. Its goal is to enhance the Cayman Islands’ AML/CFT regime in line with international best practices.

Key Points of the Strategy

  1. Legal and regulatory framework: Enhancing the jurisdiction’s AML/CFT/CFP legal and regulatory framework.
  2. Risk-based supervisory framework: Implementing a comprehensive risk-based supervisory framework.
  3. Sanctions, intelligence, investigation, enforcement, and asset recovery: Strengthening these areas.
  4. Domestic cooperation and coordination: Enhancing domestic cooperation and coordination.
  5. International cooperation: Ensuring an efficient and effective system for international cooperation.
  6. Public awareness: Raising AML/CFT/CFP awareness amongst all stakeholders and the general public.

Addressing Weaknesses

The strategy builds upon findings from the National ML/TF Risk Assessment conducted in December 2015 and the CFATF Mutual Evaluation Report published in March 2019. These reports identified weaknesses such as:

  • Less than fulsome implementation of the risk-based approach
  • Limited supervision of Designated Non-Financial Businesses and Professions (DNFBPs) outside of TCSPs
  • Limited supervision of non-profit organizations

Addressing Identified Weaknesses

To address these weaknesses, the strategy outlines various actions:

  • Supervision for DNFBPs: Establishing supervisors for DNFBPs
  • Effective sanctions: Proceeds of Crime Law amendments to allow for effective, proportional, and dissuasive administrative and criminal sanctions for breaches of AML/CFT laws
  • Improved staffing: Improving staffing levels at the FRA and the FCU for more efficient handling of suspicious activity reports (SARs) and financial crimes cases

Commitment to Improvement

The Cayman Islands has taken significant steps to address the issues identified. This includes:

  • The passage of amendments to the Proceeds of Crime Law and the Anti-Money Laundering Regulations
  • The establishment of a supervisory framework for non-profit organizations
  • The recruitment of additional human resources at the FRA and the FCU

Public Awareness and Risk Assessments

The strategy also includes provisions for raising public awareness of financial crimes and their impact on the jurisdiction, as well as regular risk assessments to ensure that the Cayman Islands remains responsive to evolving threats.

Conclusion

The Cayman Islands remains dedicated to improving its AML/CFT regime and meeting international standards. The new strategy provides a clear roadmap for enhancing the jurisdiction’s legal and regulatory framework, supervisory practices, and international cooperation efforts to effectively combat money laundering, terrorist financing, and proliferation financing.