Financial Crime World

Title: Cayman Islands Strengthens Anti-Money Laundering Laws: key Updates and Legislation

The Cayman Islands, a renowned international financial center, continues to fortify its regulatory framework against money laundering, terrorist financing, and Weapons of Mass Destruction Proliferation Financing (WMDPF). This response is in line with the Jurisdiction’s National Risk Assessment and AML/CFT Strategy. The Cayman Islands Monetary Authority (CIMA) spearheads the legislative and regulatory updates, ensuring the Jurisdiction remains a robust and responsible financial hub.

Key Legislation

  1. Monetary Authority Act
  2. Proceeds of Crime Act
  3. Anti-Money Laundering Regulations
  4. Proliferation Financing (Prohibition) Act
  5. Terrorism Act

Proceeds of Crime Act, AML/CFT Regulations, and Sanctions Orders

These foundational measures form the cornerstone of the Cayman Islands’ strategy to prevent and detect money laundering and terrorist financing. They are reinforced by:

  • The Terrorism (United Nations Measures) (Overseas Territories) Order 2001
  • The Anti-terrorism (Financial and Other Measures) (Overseas Territories) Order 2002
  • The Terrorist Asset-Freezing Act 2010 (Overseas Territories) Order 2011

Proliferation Financing (Prohibition) Act

The Proliferation Financing (Prohibition) Act grants the Cayman Islands Monetary Authority (CIMA) the power to act against individuals who may have links to terrorist financing, money laundering or development of weapons of mass destruction. Orders issued under this act are published in the Cayman Islands Gazette.

  • The United Nations has passed two resolutions focusing on anti-proliferation.
  • These resolutions are effective in the Cayman Islands via orders passed in the UK:
    • The Iran (Restrictive Measures) (Overseas Territories) Order 2012
    • The North Korea (United Nations Measures) (Overseas Territories) Order 2006

Terrorism Act

This domestic legislation criminalizes terrorism and terrorist financing in accordance with the UN Convention on the Suppression of Terrorist Financing. It is an offense under the law to:

  1. Solicit, receive or provide property for terrorism-related purposes.
  2. Use property for terrorism or possess property with the intent to use it for terrorism or reasonable suspicion it may be used for terrorism.
  3. Enter into an arrangement providing property to another, knowing or suspecting it will be used for terrorism.
  4. Conceal, remove, or transfer terrorist property.
  5. Amendment to the Terrorism Act (section 200, Proceeds of Crime Act):
    • Use property for terrorism.
    • Possess property intending it be used for terrorism or having reasonable cause to suspect it may be used for terrorism.
    • Possess, acquire, or receive property that has been used in the commission of an act of terrorism.
    • Acquire property in connection with acts of terrorism.

As the global financial landscape evolves, the Cayman Islands remains steadfast in its commitment to maintaining a strong and comprehensive regulatory framework to address the threats of money laundering, terrorist financing, and weapons of mass destruction proliferation financing. Stay informed by signing up for our E-alerts to keep up-to-date with the latest releases and industry news and insights.