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Cayman Islands’ Know Your Customer Regulations: A Summary of the Latest Requirements

The Cayman Islands Monetary Authority (CIMA) has recently made significant amendments to its Anti-Money Laundering (AML) Regulations, which have significant implications for financial institutions operating in the region. As a major offshore tax haven, it is essential that businesses understand the latest Know Your Customer (KYC) requirements to ensure compliance and avoid any potential penalties.

Key Changes

  • Financial service providers must now assess the jurisdiction of an applicant for business and identify their money laundering and terrorist financing risks.
  • The assessment should take into account factors such as:
    • Country or geographic area of operation
    • Products and services offered
    • Delivery channels used

Risk-Based Approach

CIMA requires a risk-based approach to AML/Combating the Financing of Terrorism (CTF) risk management. Financial institutions must identify, assess, and understand their risks in relation to: + Customers + Countries + Products + Transactions

Customer Due Diligence

  • CDD requirements have been tightened: financial service providers are required to conduct customer due diligence for all business relationships.
  • Simplified due diligence may be applicable in certain circumstances, but this must be assessed on a case-by-case basis.

Beneficial Ownership

Financial institutions are required to identify and verify the beneficial owners of legal persons at a threshold of 10%, unless simplified due diligence applies.

Targeted Financial Sanctions Obligations

CIMA has introduced specific requirements for targeted financial sanctions obligations applicable in the Cayman Islands. Financial institutions must have procedures in place to ensure compliance with these sanctions and identify assets subject to them.

Politically Exposed Persons (PEPs)

  • Financial service providers must take reasonable measures to establish the source of wealth and funds for PEPs and their associates.
  • Ongoing monitoring is crucial: financial institutions must continuously monitor associated risk and escalate as necessary.

Ongoing Monitoring

Financial institutions must review existing customers regularly to ensure that their KYC information remains up-to-date and accurate.

Compliance Support

For businesses looking to stay compliant with these regulations, Lysis Financial offers a range of services, including: + Managed service support + Transaction monitoring + AML screening + Ongoing monitoring + Consulting and advisory services

With extensive expertise in the field of AML, our team can help financial institutions navigate the complex regulatory landscape and ensure compliance with CIMA’s revised AML Regulations.

Learn More

For more information on how Lysis Financial can assist your business, please visit our website at www.lysisgroup.com.