Financial Crime World

Risk Management and Mitigation in the Cayman Islands

Recent Improvements

The Cayman Islands have made significant strides in upgrading their Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) environment since 2015. These improvements include:

  • Achieving full compliance with FATF 40 Recommendations
  • Overhauling the legislative framework for AML/CFT/CFP
  • Improving national and sectoral understanding of ML/TF/PF risks through targeted risk assessments
  • Extending AML/CFT/CFP regime coverage to new sectors, such as lawyers, accountants, and real estate agents
  • Implementing a risk-based approach to AML/CFT/CFP supervision

Challenges

Despite these improvements, human and technological resource challenges persist across agencies with critical AML/CFT/CFP mandates.

New Strategy

Since the 2021 National Risk Assessment (NRA), collective efforts have focused on outreach and designing targeted risk mitigation and management measures to address identified risks. The resulting strategy aims to safeguard the Cayman Islands’ financial and economic systems against abuse by criminal actors.

Strategic Themes, Objectives, and Actions

The new strategy has been organized around three strategic themes:

  • Objective: To secure a modern risk-based legislative framework that is effective in preventing, detecting, and responding to money laundering, terrorist financing, and proliferation financing risks.
  • Actions:
    • Revising the legislative framework to align it with new and emerging risks, requirements, and best practices.

Theme 2: Strengthening AML/CFT/CFP Supervision

  • Objective: To enhance supervision to prevent, detect, and respond to money laundering, terrorist financing, and proliferation financing risks.
  • Actions:
    • Enhancing the supervision of financial institutions and other sectors covered by the AML/CFT/CPF regime.

Theme 3: Enhancing International Cooperation and Coordination

  • Objective: To strengthen cooperation and coordination with international partners to combat ML/TF/PF.
  • Actions:
    • Improving information sharing and coordination with international partners to prevent, detect, and respond to money laundering, terrorist financing, and proliferation financing risks.

Stakeholders

The report outlines various stakeholders involved in implementing these strategic themes, including:

  • Anti-Money Laundering Sub-Group (AMLSG)
  • Ministry of Financial Services & Commerce
  • Inter-Agency Coordination Committee
  • Other relevant authorities and agencies.