On 19 March 2019, the Caribbean Financial Action Task Force ("CFATF") published a Mutual Evaluation Report into Anti-Money Laundering ("AML") and Counter-Terrorist Financing ("CFT") measures in the Cayman Islands (the "Report")1.
The CFATF evaluated the measures in place in the Cayman Islands as at the date of their onsite visit (4 to 15 December 2017). The Report analyses the level of compliance with the FATF 40 Recommendations2, the level of effectiveness of the Cayman Islands' AML / CFT system, and provides recommendations on how the regime could be strengthened.
In general, the Report found that the Cayman Islands has a high level of commitment to ensuring its AML / CFT framework is robust and capable of safeguarding the integrity of the jurisdiction's financial sector. The jurisdiction's AML / CFT regime is complemented by a well-developed legal and institutional framework.
The Cayman Islands scored well on technical compliance. Strengths were identified in the areas of preventative measures (adequate AML / CFT risk-based policies and procedures) and supervision of Financial Institutions, the adoption of the beneficial ownership registration regime, and mutual legal assistance. The Cayman Islands achieved ratings of either Compliant or Largely Compliant for 27 out of the 40 Recommendations, with no 'Non-Compliant' ratings.
In relation to the 'Immediate Outcomes' on effectiveness and implementation, certain recommendations were made in the Report, which we understand the Cayman Islands Government intends to consider and address.
The CFATF also acknowledged that a number of significant changes made to the Cayman Islands' legislative framework prior to, and during, the onsite visit by CFATF, but were not able to be taken into consideration fully. These changes, that have already been implemented, are intended to further enhance the overall effectiveness of the Cayman Islands' AML / CFT regime, e.g. the Anti-Money Laundering Regulations (2018 Revision).
We understand that the Cayman Islands Government will consider and address the Report's recommendations over the coming months, including by introducing further legislative enhancements, and will continue to work closely with the CFATF, as well as the FATF's International Cooperation Review Group (which will then issue a further report in due course).
1 A copy of the report can be found here.
2 A copy of the standards can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.