Title: Cayman Islands Revamps Anti-Money Laundering Regulations: A Look at Key Changes

Introduction

The Cayman Islands has updated its Anti-Money Laundering Regulations (AMLR), consolidating three sets of amendments made in 2020. This 2023 revision simplifies previous regulatory requirements for those engaged in relevant financial business in the Cayman Islands by consolidating all amendments into a single document. Let’s explore some of the major changes.

Elimination of Equivalent Jurisdictions List

• Starting from 2023: Persons conducting relevant financial business can no longer rely on the Equivalent Jurisdictions List published by the Anti-Money Laundering Steering Group (AMLSG). [1]
• New requirement: A risk assessment must be carried out for each jurisdiction before simplified due diligence or other permitted actions can be taken in low-risk situations.

Country Risk Assessments

• New regulations: Specific requirements for conducting risk assessments were introduced in 2023. [2]
• Process: Persons involved in relevant financial business must use credible sources to evaluate risks related to money laundering, terrorist financing, proliferation financing, corruption, and other criminal activities.
• No low-risk determination: A determination of low risk should not be made if any identified risk factor is present.

Virtual Assets Transfers

• Effective date: Identification and record-keeping requirements for transfers of virtual assets became effective on 1 July 2022. [3]
• Requirements: Financial institutions must collect and record details regarding the originators and beneficiaries of these transfers.

Other Significant Amendments

The AMLR were also modified to address various other areas, for instance:

• Eligible introducer assurance letters: Extra prescribed content requirements were added for these letters.
• PEPs definition: The definition of “family member” in the context of Politically Exposed Persons (PEPs) was expanded to include civil partners, in addition to spouses, parents, siblings, and children. [4]

How Ogier Can Help

Ogier, a leading legal firm, offers experienced Regulatory teams that provide counsel to funds and other regulated entities in the Cayman Islands regarding anti-money laundering matters. Additionally, Ogier Regulatory Consulting offers independent regulatory consulting services, including Cayman Islands AML audits. Working in collaboration with Ogier’s global team of regulatory law specialists, Ogier Regulatory Consulting helps clients understand and implement regulatory requirements. [5]

[1]: AMLR, Regulation 25B [2]: AMLR, Part VIA and Schedule 5 [3]: AMLR, Part VIB, Section 7 [4]: AMLR, Part XII [5]: Contact Ogier for more information