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Cayman Islands Enforces Economic Sanctions with Criminal Penalties

The Financial Reporting Authority (FRA) of the Cayman Islands expects individuals and entities to comply with economic sanctions laws and regulations. While there is no specific mandate for a compliance program, regulated sectors such as banking and investment funds are subject to separate regulatory requirements that may include maintaining a compliance program.

Criminal Penalties

Violations of economic sanctions laws and regulations can result in criminal penalties, including:

  • Fines at the discretion of the Grand Court of the Cayman Islands (which may be unlimited but cannot be excessive)
  • Up to seven years’ imprisonment

These penalties apply not only to individuals but also to directors or controllers of companies that breach the sanctions regulations.

Investigation and Prosecution

The FRA is responsible for investigating sanctions offenses, with assistance from the Royal Cayman Islands Police Service as needed. The Director of Public Prosecutions (DPP) determines whether a case should be prosecuted based on available evidence and whether it is in the public interest.

Corporate and Personal Liability

Both individuals and companies can face fines and penalties for violating economic sanctions laws and regulations. Directors or controllers of companies that breach the sanctions regulations can also be held personally liable if they:

  • Consented to, connived at, or were negligent in the commission of the offense

Appeals and Consequences

Conviction for breach of economic sanctions laws and regulations can result in:

  • Imprisonment
  • Fines
  • Loss of licenses or regulatory approvals

The Cayman Islands Court of Appeal reviews appeals against conviction and sentence, with grounds for appeal limited to questions of law alone or with leave of the court.

Accessing Relevant Materials

The Sanctions and Anti-Money Laundering Act 2018, relevant Regulations, and Orders can be accessed online at [Hyperlink]. The FRA’s website also provides guidance on sanctions in the Cayman Islands, including:

  • Relevant sanctions lists
  • Reporting forms

Note: [Hyperlink] should be replaced with the actual link to the relevant materials.