Financial Crime World

Title: Cayman Islands Strengthens AML/CFT/CPF Framework: New Strategy Outlines Key Objectives and Actions

Introduction

The Cayman Islands Anti-Money Laundering (AML) Steering Group has published a new AML/Counter-Terrorist Financing (CTF), and Counter-Proliferation Financing (CPF) strategy for the period 2022-2025. This strategy follows the release of the country’s second National Risk Assessment and aims to address the identified ML/TF/PF risks.

Progress and Challenges

The Cayman Islands have made progress in enhancing their AML/CFT/CPF framework, as highlighted in the CFATF Mutual Evaluation Report published in 2019. While the country achieved compliance or largely compliant ratings for most FATF Recommendations, it faced strategic deficiencies and was under enhanced follow-up due to a US$5.0 billion threshold for broad money. With targeted national efforts, the Cayman Islands achieved full compliance with all FATF Recommendations by November 2021.

National Risk Assessment

The 2021 National Risk Assessment was a collaborative effort involving government departments, competent authorities, and the private sector. The assessment found that drug trafficking, fraud/theft, and corruption remain the primary domestic threats to the Cayman Islands. However, the greatest ML threat comes from proceeds generated from foreign crimes. The financial and Designated Non-Financial Businesses and Professions (DNFBPs) sectors were identified as most vulnerable to money laundering risks.

Strategic Themes and Actions

The new strategy outlines several strategic themes with corresponding objectives and actions aimed at further strengthening the Cayman Islands’ AML/CFT/CPF framework:

Objective 1:

  1. Secure a modern risk-based legislative framework that is consistent with international standards and effective in preventing, detecting, and responding to ML/TF/PF risks.

Stakeholders:

  • AMLSG
  • Ministry of Financial Services & Commerce (MFSC)
  • Inter-Agency Coordination Committee (IACC)
  • Anti-Money Laundering Unit (AMLU)
  • Cayman Islands Monetary Authority (CIMA)
  • Other public sector or self-regulatory bodies

Actions:

  1. Continuously enhance the legislative and regulatory framework to align with new and emerging risks, international best practices, and evolving demands of an effective AML/CFT/CPF framework regime.

The strategy also includes sectors such as:

  • Risk-based supervision
  • Sanctions
  • Intelligence
  • Enforcement
  • Domestic cooperation
  • International cooperation
  • Raising awareness among stakeholders and the general public

Each of these sectors includes specific objectives and actions designed to mitigate ML/TF/PF risks and strengthen the overall AML/CFT/CPF regime in the Cayman Islands.