Financial Crime World

Cayman Islands Tightens Grip on Anti-Money Laundering Regulations

The Cayman Islands has undergone significant refinements to its legislative framework aimed at strengthening its stance against money laundering, terrorist financing, and proliferation financing. This move is designed to enhance the jurisdiction’s regulatory landscape and prevent illicit activities.

Key Legislation

  • The Proceeds of Crime Act
  • Anti-Money Laundering Regulations
  • Proliferation Financing (Prohibition) Act
  • Terrorism Act

Risk-Based Approach

The Cayman Islands Monetary Authority (CIMA) has established a risk-based approach to prevent and detect money laundering and terrorist financing through:

  • The Proceeds of Crime Act
  • AML/CFT regulations
  • Sanctions Orders
  • 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 empowers CIMA to take action against individuals or entities involved in activities linked to:

  • Terrorist financing
  • Money laundering
  • Development of weapons of mass destruction

Orders issued under this act are published in the Cayman Islands Gazette.

United Nations Resolutions

The United Nations has passed two resolutions related to anti-proliferation, targeting North Korea and Iran. These resolutions have been incorporated into Cayman Islands law through orders from the UK.

Terrorism Act

The Terrorism Act is a domestic legislation that criminalizes terrorism and terrorist financing, aligning with the UN Convention on the Suppression of Financing of Terrorism. The act makes it an offense to:

  • Solicit, receive, or provide property intending it be used for terrorist purposes
  • Use or possess property for terrorist purposes

Definition of Property

Section 2 of the act defines property broadly, encompassing:

  • Money
  • All other assets, real or personal

Section 18 further defines “terrorist property” as any asset likely to be used for terrorist activities or proceeds from acts of terrorism.

Commitment to Anti-Money Laundering Regulations

The Cayman Islands’ AML/CFT regulatory framework is designed to respond to emerging risks and is informed by the latest National Risk Assessment and national AML/CFT Strategy. The jurisdiction’s commitment to anti-money laundering regulations has been recognized globally, solidifying its position as a trusted financial hub.