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Cayman Islands Mandates Reporting of Threshold Transactions
The Financial Reporting Authority (FRA) has strict reporting requirements for financial institutions and money service businesses operating in the Cayman Islands. These regulations aim to combat money laundering and terrorist financing by ensuring transparency and accountability.
Money Service Business Thresholder Reporting
Under the AML (Money Services Business Thresholder Reporting) Regulations, 2020, money service businesses must report transactions exceeding $3,500 within a one-month period. This includes single transactions or multiple transfers involving the same sender or receiver.
Bank Reporting Requirements
Banks are also required to file monthly reports with the FRA for “threshold transfers” of $100,000 or more. These reports include details on wire transfers sent or received by the bank.
Traveler Declaration Requirements
The Customs and Border Control (Money Declarations and Disclosures) Regulations, 2019 impose requirements on individuals carrying $10,000 or more into or out of the Cayman Islands. False declarations can result in fines up to $10,000, imprisonment for up to one year, or both.
Cross-Border Transactions Reporting Requirements
Financial institutions operating in the Cayman Islands must:
- Assess country risk and identify incomplete transfers
- Establish risk-based policies and procedures for wire transfers
- Maintain records of customer identification and verification
Customer Identification and Due Diligence Requirements
Financial institutions and other businesses subject to anti-money laundering requirements must:
- Implement tailored procedures to assess money laundering and terrorist financing risks associated with customers
- Identify and verify applicants
- Adopt a risk-based approach
- Maintain records
- Implement internal controls
Reporting Suspicious Activity
Individuals are required to report suspicions of money laundering or criminal conduct to the designated officer promptly. Entities must also:
- Obtain customer due diligence information
- Refrain from initiating or continuing business relationships if unable to do so
Information Sharing Mechanisms
The Cayman Islands has established mechanisms for public-private information exchange between government authorities, financial institutions, and businesses subject to anti-money laundering controls. This enables the sharing of essential information to assess risks associated with money laundering.
Beneficial Ownership and Control Information
The Cayman Islands operates under a beneficial ownership regime (BOR) that regulates the collection, maintenance, and sharing of information about the ultimate beneficial ownership or control of Cayman Islands companies and limited liability companies. This information is available to government authorities and financial institutions to assist with anti-money laundering customer due diligence responsibilities.
In conclusion, the Cayman Islands has implemented strict reporting requirements for financial institutions and money service businesses to combat money laundering and terrorist financing. These regulations aim to ensure transparency and accountability in the financial sector.