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Cayman Islands Financial Sanctions Enforcement: Authorities Issue Guidance for Compliance
In a move to ensure compliance with financial sanctions obligations in the Cayman Islands, the Financial Reporting Authority (FRA) has issued guidance on financial sanctions enforcement. The “Financial Sanctions Guidance” was published in February 2020 and aims to assist relevant institutions, businesses, and professions in complying with their obligations under financial sanctions.
Background
The FRA has implemented measures to enforce financial sanctions restrictions imposed by the UN, EU, or UK to achieve specific foreign policy or national security objectives. These sanctions are applied against countries, regimes, or persons designated for violating international laws and aim to:
- Change conduct
- Imposes punitive measures
- Signal disapproval
- Protect assets
- Deter terrorism
- Suppress nuclear proliferation
Compliance Requirements
According to Regulation 5 of the Anti-Money Laundering Regulations (AMLRs), firms of attorneys-at-law conducting relevant financial business are required to implement procedures to ensure compliance with financial sanctions obligations applicable in the Cayman Islands. To aid in this effort, the FRA launched a sanction alerts automatic email notification system in October 2019.
Importance of Compliance
The FRA strongly advises all law firms to subscribe relevant staff to this alert system and keep up-to-date with their sanctions obligations. The authority’s list of sanctions targets by regime in force in the Cayman Islands (as of April 21, 2023) is available online.
Recent Developments
In particular, following the UK government’s imposition of sanctions on Russia, firms must ensure they are well-versed in their sanctions obligations. The Russia sanctions regime aims to discourage Russia from destabilizing Ukraine or undermining its territorial integrity, sovereignty, or independence. The FRA has issued a public announcement dated March 1, 2022, which is available online.
Call to Action
The authorities emphasize the importance of compliance with financial sanctions regulations and urge all relevant institutions, businesses, and professions to:
- Familiarize themselves with the guidance
- Take necessary steps to ensure compliance
By following these guidelines, firms can ensure they are meeting their obligations under financial sanctions and avoiding potential penalties.