Financial Crime World

Title: Cayman Islands Cracks Down on Financial Crimes: New Guidance Notes on Money Laundering, Terrorist Financing, and Proliferation Financing

The Cayman Islands Monetary Authority (CIMA) has issued new Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing, and Proliferation Financing (ML/TF/PF) in the Cayman Islands. These Notes clarify the requirements for financial service providers (FSPs) to ensure compliance with anti-financial crime regulations and safeguard the islands’ financial sector.

Contacting the Cayman Islands Monetary Authority

  • Cayman Islands Monetary Authority
  • SIX, Cricket Square, P.O. Box 10052, Grand Cayman KY1-1001, Cayman Islands
  • Tel: (345) 949-7089
  • Fax: (345) 945-6131
  • Website: www.cima.ky
  • Email: ContactAMLCFT@cima.ky

New Foreword

As a leading international financial center, the Cayman Islands is dedicated to maintaining a robust regulatory framework against ML/TF/PF. These new Guidance Notes offer practical advice and requirements for FSPs to effectively prevent and detect financial crimes in the Cayman Islands.

Scope and General Matters

This section outlines the Scope of the Cayman Islands’ regulatory framework against ML/TF/PF and the purpose of the Guidance Notes.

Money Laundering

Money laundering is the process of disguising the proceeds of illegal activities as legitimate funds, which can harm financial institutions and the Cayman Islands’ reputation.

  • What is Money Laundering? The Guidance Notes define money laundering under Cayman Islands law and discuss its importance in combating this financial crime.

Terrorist Financing

Terrorist financing involves providing funds for terrorist activities or supporting organizations that engage in such activities.

  • Definitions and Sources The Guidance Notes detail the definitions of terrorist financing under local and international law, as well as potential sources and methods used by terrorists.

Proliferation Financing

Proliferation financing supports the development, production, or acquisition of weapons of mass destruction and their means of delivery.

  • Definition The Guidance Notes explain the definition of proliferation financing and the role FSPs play in prevent its occurrence.

The Importance of Effective ML/TF/PF Prevention and Detection

Effective measures against ML/TF/PF help create a secure and stable financial environment, protect institutions from reputational damage, and promote a level playing field for legitimate businesses.

Upcoming Content

In the following sections, we will discuss:

  • The legal and regulatory framework in place for ML/TF/PF prevention and detection in the Cayman Islands
  • Guidance on FSPs’ compliance programs, systems, and training obligations
  • Risk assessment and a risk-based approach
  • Customer due diligence procedures
  • Money laundering reporting officers and internal controls
  • Record-keeping procedures and money laundering reporting

To be continued…