Partner, Ian Mason and associate, Beth Waterfall provide an overview of AML landscape in the Cayman Islands.
The Cayman Islands has one of the most robust anti-money laundering, counter-terrorist financing and counter-proliferation financing("AML/CTF/PF") regimes in the Caribbean region. It is a member of the Caribbean Financial Action Task Force and plays a criticalleadership role in the development and implementation of AML/CTF/PF regimes in the offshore financial services market. In the lastdecade, the Cayman Islands have introduced a plethora of legal reforms, which have resulted in the establishment of a robust andeffective regime. This, in combination, with an informed and dynamic regulator, has resulted in the Cayman Islands enjoying a strong,but business-friendly compliance culture.
The Cayman Islands has a comprehensive AML regulatory regime which continues to evolve in order to address present and emergingthreats to the global financial market and ensures that there are adequate controls in place to safe-guard against risk. The CaymanIslands' current regulatory regime stems from a proactive response to legal reforms and desire by the Cayman Islands government tohave an effective and globally recognised regime.
A strong but commercial regulatory regime is particularly important given that the financial services sector accounts for around 40%of the Cayman Islands GDP. The international nature of the Cayman Islands funds industry also means that the Cayman Islands isat risk as being a destination for illicit funds where the predicate offence has occurred abroad. The significant size of the CaymanIslands offshore funds industry and the major role accounting and legal services plays in facilitating the funds industry, means that theCayman Islands is a jurisdiction at risk specifically from the layering and integration stages of money laundering. The Cayman IslandsNational Risk Assessment notes that any jurisdiction heavily focused on financial services will have an increased risk of domestic andinternational money laundering and terrorism financing, it is because of this the Cayman Islands continues to have a long-standing commitment to combatting financial crime.
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This article has been first published by Thomson Reuters Regulatory Intelligence.
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