Financial Crime World

Cayman Islands’ Financial Reporting Authority Evolves to Combat Money Laundering and Terrorist Financing

The Cayman Islands’ Financial Reporting Authority (FRA) has undergone significant changes since its inception in the early 1980s as the Financial Investigation Unit. Initially operating within police headquarters, it was renamed the Financial Reporting Unit (FRU) in 2000, with a civilian head of unit and appointed legal advisor.

Evolution of the FRA

  • In 2004, the FRA underwent another transformation, becoming a full-pledged civilian body responsible for receiving, analyzing, and disseminating financial intelligence to authorized agencies.
  • This change came about with the introduction of the Proceeds of Criminal Conduct Law (PCCL), which mandated that the FRA shift its focus from investigative work to analytical-type Financial Intelligence Unit.

Shift in Focus

  • In 2008, the PCCL was repealed and replaced by the Proceeds of Crime Law (PCL), further solidifying the FRA’s independence and existence.
  • The agency’s role has since evolved to prioritize the receipt and analysis of financial information, with the goal of disseminating intelligence to agencies where authorized.

Combating Terrorism Financing

  • During the 2016-2017 fiscal year, the FRA assumed responsibility for implementing targeted financial sanctions related to terrorism, terrorist financing, proliferation, proliferation financing, and anti-money laundering (AML) and combating the financing of terrorism (CFT) and proliferation (CFP).
  • A Sanctions Coordinator position was created within the FRA during this period, tasked with ensuring compliance with the sanctions regime.

Industry Guidance

  • In 2017, the FRA issued industry guidance to assist relevant institutions in complying with targeted financial sanctions related to terrorism and terrorist financing, as well as proliferation of weapons of mass destruction and its financing.

Continued Role

  • The FRA continues to play a crucial role in combating money laundering and terrorist financing in the Cayman Islands, working closely with private sector organizations and government agencies to ensure compliance with international standards.