Here is the rewritten article in Markdown format:
Financial Sanctions Enforcement in Cayman Islands: A Comprehensive Overview
======================================================
The Cayman Islands, as a British Overseas Territory, has implemented various international financial sanctions measures to combat terrorism, proliferation financing, and money laundering. These measures are adopted by two key international bodies: the United Nations (UN) through resolutions passed by the UN Security Council (UNSCRs) and the European Union (EU) through EU regulations.
Implementation of Sanctions in Cayman Islands
The UK Government passes Orders in Council implementing UN or EU sanctions and extending them to Overseas Territories like the Cayman Islands. These Orders have the force of law, making breaches an offence punishable by fines and/or criminal convictions.
Proliferation Financing (Prohibition) Act
In addition, the Proliferation Financing (Prohibition) Act empowers the Financial Reporting Authority to issue directions to financial services providers regarding terrorist financing, money laundering, or proliferation activities. Failure to comply with these directions constitutes an offence and may result in penalties.
Responsibilities of Financial Service Providers
Financial service providers are responsible for implementing systems and controls to:
- Conduct initial due diligence
- Ongoing monitoring
- Reporting
They must also freeze assets and report suspicious transactions related to sanctions violations.
Compliance Requirements
A list of Orders in force in the Cayman Islands can be found on the website. However, it is the responsibility of financial service providers to keep themselves updated and comply with applicable sanctions.
Licences for Prohibited Activities
In some cases, a licence may be available allowing for activities that would otherwise be prohibited. Applications for such licences must be made in writing to the Financial Reporting Authority, along with relevant documentation.
Importance of Compliance
The Cayman Islands’ financial sector plays a crucial role in enforcing international sanctions, and all stakeholders are expected to comply with these measures to prevent money laundering, terrorist financing, and proliferation activities.
Stay informed about the latest developments by signing up for our E-alerts and industry news and insights.