Financial Crime World

Cayman Islands See Amendments to KYC Requirements: Financial Institutions Must Adapt

The Cayman Islands Monetary Authority (CIMA) has introduced significant changes to the Anti-Money Laundering (AML) Regulations, affecting financial institutions operating in the jurisdiction. These new regulations aim to strengthen the country’s AML/Combating the Financing of Terrorism (CTF) framework and ensure compliance with international standards.

Key Amendments

One of the key amendments is the abolition of the Equivalent Jurisdiction List, which previously determined whether simplified due diligence was applicable for certain applicants. Instead, financial service providers or their AML/CTF service providers must now assess the jurisdiction of the applicant to determine the level of due diligence required.

Risk-Based Approach

The risk-based approach remains a crucial aspect of Cayman Islands’ KYC requirements, with entities required to:

  • Identify and assess money laundering and terrorist financing risks
  • Consider factors such as:
    • Nature and size of the business
    • Products and services offered
    • Customer demographics
    • Geographic location

Customer Due Diligence (CDD)

CDD is also a critical component, with financial institutions required to:

  • Conduct CDD for certain transactions, including those valued over $10,000 or involving wire transfers
  • Identify and verify beneficial ownership at a threshold of 10%, unless simplified due diligence applies

Sanctions Compliance

The new regulations emphasize the importance of sanctions compliance, requiring financial institutions to have procedures in place to:

  • Identify assets subject to targeted financial sanctions
  • Politically Exposed Persons (PEPs) must be identified and escalated as part of the review process, with ongoing monitoring of their associated risk

Ongoing Monitoring

Ongoing monitoring is another key requirement, with financial service providers obligated to:

  • Review existing customers regularly to ensure compliance with current KYC requirements
  • Keep customer data up-to-date
  • Review records at appropriate times

Lysis Financial’s Support Services

To help financial institutions navigate these changes, Lysis Financial offers a range of services, including:

  • Managed service support
  • Transaction monitoring
  • AML screening and ongoing monitoring
  • Consulting and advisory services

Our Consulting Team and AML Operations Centre can assist firms in implementing effective KYC procedures and maintaining compliance with Cayman Islands’ regulations.

Learn More

For more information on how Lysis Financial can help your organization adapt to these changes, please visit our website at https://www.lysisgroup.com/.