Financial Crime World

Money Laundering Crimes and Ethical Dilemmas in the Cayman Islands: An In-depth Look

The Cayman Islands, a British Overseas Territory in the Caribbean, is renowned for its sophisticated financial services sector. This factor makes it an attractive target for financial crimes such as money laundering. In this article, we explore the legal framework against money laundering in the Cayman Islands and delve into the ethical dilemmas that arise when dealing with suspect transactions.

The primary legislation in the Cayman Islands addressing money laundering is the Proceeds of Crime Act (As Revised) (POCA). The POCA describes the actions and acts that may constitute money laundering offenses. Additional laws support this act and combat related crimes, such as:

  • The Terrorism Act (As Revised) treats the facilitation of terrorist property as a money laundering offense.
  • The Proliferation Financing (Prohibition) Act (As Revised) treats the acquisition, retention, use, or control of funds and economic resources to fund unauthorized proliferation activities as a money laundering offense.
  • The Misuse of Drugs Act (As Revised) criminalizes dealing with proceeds from drug trafficking.
  • The Anti-Corruption Act (As Revised) provisions apply to the proceeds of corruption offenses.
  • The Anti-Money Laundering Regulations (As Revised) outline the procedures relevant financial businesses must follow to prevent money laundering.

[Contributed by Christopher Capewell, Adam Huckle, Tim Dawson, and Christopher Carroll of Maples Group]

2. Elements to Establish a Criminal Violation of Money Laundering Laws

In the Cayman Islands, the government must prove specific elements to establish a criminal violation of the money laundering laws. These elements include:

  1. Proving that the property involved is ‘criminal property’: The government must show that the property in question is derived from an unlawful activity, such as drug trafficking, terrorist financing, or embezzlement.
  2. Proving that the offender knows or suspects that the property constitutes or represents ‘criminal property’: The government must prove that the individual knew or had reasonable grounds to suspect that the property was the proceeds of a criminal offense.
  3. Establishing the elements of the underlying offense that generated the criminal property: The government must prove the underlying criminal offense, for example, drug trafficking, embezzlement, etc.

[Contributed by Christopher Capewell, Adam Huckle, Tim Dawson, and Christopher Carroll of Maples Group]

Stay tuned for the next parts where we will discuss the predicate offenses, extraterritorial jurisdiction, corporate criminal liability, and other aspects related to money laundering in the Cayman Islands.