Financial Crime World

Cayman Islands Amends Anti-Money Laundering Regulations to Enhance Compliance and Transparency

The Cayman Islands has strengthened its anti-money laundering (AML) regulations by amending the Anti-Money Laundering Regulations (AMLRs), which came into effect on April 19, 2024. The revisions aim to improve compliance with international standards and enhance transparency in the financial sector.

Key Changes

  • Expanded Scope: AML compliance requirements now extend to counter-terrorist financing and proliferation financing measures, ensuring entities operating in the Cayman Islands are equipped to combat these threats more effectively.
  • Customer Due Diligence Thresholds: The threshold for one-off transactions has been reduced to CI$10,000, aligning with international standards. Obsolete references to the previous threshold of CI$15,000 have been corrected to avoid confusion.

Virtual Asset Holders

  • Clarified Information Requirements: Batch files now require clarified information, ensuring greater transparency and accountability for virtual asset holders.

Risk Assessments

  • Stricter Requirements: Entities are expected to maintain up-to-date risk assessments and provide them on request to regulatory authorities. The Cayman Islands Monetary Authority (CIMA) has emphasized the importance of inspecting these risk assessments during audits.
  • Consistency with National Requirements: Risk mitigation controls must now be consistent with national requirements and regulator guidance, ensuring a cohesive approach to AML compliance across the sector.

Enhanced Due Diligence

  • Higher-Risk Transactions: The scope of enhanced due diligence for higher-risk transactions has been expanded, including specific requirements for sanctions screening in cases involving proliferation financing risks.

Administrative Fines

  • Individual Liability: The amendments clarify that entities committing AML breaches with the consent or connivance of a director, manager, secretary can face fines against those individuals.

Designated Non-Financial Businesses and Professions (DNFBPs)

  • Additional Information Requirements: DNFBPs are now required to provide additional information on registration with their relevant supervisory authority, including the identity of their AML officers and beneficial owners.
  • Notification of Changes: DNFBPs must notify their supervisory authority of any changes to their AML risk assessment.

Next Steps

If you require guidance on the amended AML regulations or have questions about your obligations as a Cayman Islands entity subject to these requirements, please do not hesitate to contact one of our experts listed below or your usual Maples Group representative.