Risk-Based Approach to Compliance in Cayman Islands Yields Significant Progress

The United Kingdom and European Union have removed the Cayman Islands from their respective “high-risk third countries” lists for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT), following the jurisdiction’s significant advancements in reforming its AML/CFT framework.

FATF Recognition

The Financial Action Task Force (FATF) has also recently removed the Cayman Islands from its “greylist”, a move that reflects the jurisdiction’s substantial progress in enhancing its AML/CFT protocols. The UK’s Economic Secretary to the Treasury has commended the Cayman Islands for its efforts, praising the jurisdiction’s alignment with or exceeding all 40 of the FATF’s recommendations.

EU Recognition

The EU, through its delegated regulation, has also recognized the Cayman Islands’ comprehensive response to the FATF’s action items and efforts in augmenting the effectiveness of its AML/CFT regime. This recognition is a testament to the jurisdiction’s commitment to regulatory compliance and combating financial crimes.

Implications for the Cayman Islands

This development has significant implications for the Cayman Islands, solidifying its reputation as a transparent and compliant financial hub. The removal from these lists is expected to attract more investors and businesses seeking a reputable jurisdiction, while also facilitating smoother international financial transactions and access to global capital.

Boost to Financial Services Industry

The boost to the financial services industry is also expected to be significant, with the Cayman Islands anticipating a surge in clients and investments as a result of its delisting from these greylists. This development will bolster the jurisdiction’s position as a leading offshore financial hub.

Quotes from Damon Wilson, Chief Compliance Officer at FundBank

“The Cayman Islands’ extrication from these lists signifies a momentous stride forward for the jurisdiction, with promising implications for our economic landscape, regulatory framework, and global reputation. At FundBank, we embody a proactive and comprehensive compliance ethos, with a firm commitment to transparency, risk management, and continual enhancement of our operational standards.”

Key Takeaways:

• The Cayman Islands has been removed from the UK’s “high-risk third countries” list for AML/CFT.
• The EU has also recognized the jurisdiction’s comprehensive response to FATF’s action items.
• This development is expected to attract more investors and businesses, facilitating smoother international financial transactions.
• The boost to the financial services industry is anticipated to be significant, solidifying the Cayman Islands’ position as a leading offshore financial hub.