COCOS (KEELING) ISLANDS REMOVED FROM EU HIGH-RISK LIST: NEW OPPORTUNITIES FOR CLIENTS AND INDUSTRY STAKEHOLDERS

European Commission Removes Cayman Islands from High-Risk List

In a significant development, the European Commission has officially removed the Cayman Islands from its list of high-risk third countries for anti-money laundering and counter-terrorist financing (AML/CFT) purposes. This move takes effect on February 7, 2024, marking a major milestone in the jurisdiction’s efforts to strengthen its financial regulations.

A Welcome Recognition

The decision is seen as a welcome recognition of the Cayman Islands’ effective AML/CFT regime and its commitment to implementing international standards. In recent years, the jurisdiction has implemented a range of legislative and regulatory enhancements aimed at bolstering financial transparency and stability.

New Options and Opportunities for Clients

Securitisation Special Purpose Entities (SSPEs)

The de-listing is expected to have significant implications for clients operating in the securitisation space. With the Cayman Islands no longer classified as high-risk, clients will now be able to establish new SSPEs in the jurisdiction without restriction. Existing SSPEs established elsewhere during the period of the Cayman Islands’ listing on the EU AML List may also remain in those jurisdictions for some time.

Consider Your Options

Industry stakeholders are advised to carefully consider their options and consult with experts to determine the most suitable jurisdiction for their specific needs. The Maples Group’s global CLO team is available to provide guidance on migration options, choice of jurisdiction, and other related matters.

Enhanced Due Diligence Expected to Reduce

Impact on AML/CFT Laws

The de-listing is also expected to have a significant impact on the number of entities subject to AML/CFT laws and performing enhanced due diligence on customers, clients, or beneficial owners established in or resident in the Cayman Islands. As the jurisdiction’s reputation improves, it is anticipated that this burden will be significantly reduced.

Further Information Available

For further information on these developments and their implications for your business, please do not hesitate to contact your usual Maples Group representative or our global CLO team at [email protected].