Financial Crime World

Targeted Financial Sanctions Guidance for Financial Service Providers in the Cayman Islands

Reporting Obligations

Financial service providers (FSPs) in the Cayman Islands are required to report matches identified on the local designations made by the Governor or on the consolidated list. This includes reporting to the Governor, through the Financial Reporting Authority (FRA), as soon as practicable, if they are aware of a person being designated or committing an offense under the legislation.

  • Report matches identified on the local designations made by the Governor or on the consolidated list.
  • Report to the Governor, through the FRA, any information about a person being designated or committing an offense under the legislation.

Types of Reports

FSPs must report various types of transactions and activities related to targeted financial sanctions. These include:

Searches and Examinations of Past Financial Activity

  • Report the results of searches and/or examinations of past financial activity by designated persons and entities.
  • Detail any involvement with listed persons or entities, directly or indirectly, or attempted transactions involving those individuals.

Incoming Transfers and Transactions

  • Report incoming transfers or other transactions resulting in the crediting of a frozen account.
  • Report attempts by clients or other persons to make funds or assets available to designated persons or entities without authorization.

Unfreezing Assets

Once a person or entity is delisted, FSPs are required to advise the Governor, through the FRA, of any actions taken in relation to that de-listed person or entity. This includes unfreezing their funds or other assets and reactivating relevant accounts.

  • Unfreeze funds or other assets upon becoming aware or receiving notification advising that a person or entity is no longer designated under a sanctions regime.
  • Reactivate relevant accounts after a person or entity has been delisted.

Exemptions and Licensing

There are certain exemptions and licensing requirements that apply to targeted financial sanctions. These include:

Transfers to Sanctioned Persons

  • An individual can make transfers to sanctioned persons or entities in certain circumstances, such as paying interest on frozen accounts.

Asset Freezing Legislation

  • Asset freezing legislation generally permits the crediting of frozen accounts with payments from third parties without a licence, provided the incoming funds are also frozen and the Governor is informed of the transaction.

Additional Requirements

FSPs must comply with additional requirements related to targeted financial sanctions. These include:

Filing Suspicious Activity Reports (SARs)

  • File a SAR if they suspect or have grounds to suspect criminal conduct separate from the person or entity being targeted.
  • The filing of a SAR may constitute tipping-off under the Prevention of Corruption Law (POCL).
  • The filing of a SAR does not provide protection in respect of offenses that may have been committed under sanctions legislation.