Cayman Islands: Cayman Islands Committed To Caribbean Financial Action Task Force (CFATF) Progress

Responding to the recently published Caribbean Financial Action Task Force (CFATF) Fourth Round Mutual Evaluation Report on the Cayman Islands, Premier Alden McLaughlin said:

"The Cayman Islands remain fully committed to upholding the highest global standards on money laundering and terrorist financing. Our anti-money laundering and counter financial terrorism action plan will send a clear signal that we intend to maintain those standards.

"We are addressing the recommendations in the Caribbean Financial Action Task Force (CFATF) Mutual Evaluation Report as a matter of priority. "A dedicated task force, comprised of a cross-section of government agencies, has been appointed to oversee the implementation of a comprehensive action plan and we are confident that all of the concerns identified in the CFATF report will be remedied within the one-year timeframe.

"Work is already underway to improve information gathering, more rigorously monitor financial activity and enhance enforcement including the confiscation of assets. "For decades, we have worked with stakeholders across the public sector and industry to successfully keep pace with regulatory changes, while remaining attractive to legitimate business activity," Mr McLaughlin added.

Cayman Islands Committed to CFATF Progress

A Ministerial Sub-Committee of Cabinet, chaired by Premier Alden McLaughlin, is working to oversee the implementation of a comprehensive action plan to address the recommendations contained in the CFATF report.

Committee members include the Attorney General, the Deputy Governor, the Minister for Financial Services, the Minister for Commerce and the Minister for Finance.

The group is leading jurisdiction-wide work to enhance the Cayman Islands AML/CFT framework. Efforts began prior to the finalisation of the report which, for the first time, separately addressed the issues of technical compliance and the effectiveness of compliance measures.

Initiatives already underway include:

  • A new focus group, headed by the Office of the Director of Public Prosecutions, is working to enhance the use of financial intelligence, as well as any eventual investigation and prosecution of financial crimes.
  • The Ministry of Financial Services is currently leading a risk assessment of legal persons and arrangements (persons who actually own and take advantage of capital and assets/persons who exercise effective control of legal arrangements).
  • The legal profession will be subject to further supervision, following the coming into force of the Legal Associations (Miscellaneous Amendments) Law, 2018. (AMLU)
  • Important supervisory gaps identified by CFATF are being closed by supervisory bodies and professional associations including: Cayman Islands Monetary Authority, the Department of Commerce and Investment, Cayman Islands Institute of Professional Accountants and Cayman Islands Legal Practitioners Association.
  • Critical amendments to legislation have been made and others are in progress;
  • The Royal Cayman Islands Police Service (RCIPS) is in the process of enhancing its financial crimes unit with greater focus on money-laundering and terrorist financing investigations .

RCIPS, in consultation with the Governor's Office, has also engaged in two other initiatives of note. It is partnering with recognised experts, the Economic Crime Unit of the City of London Police, to deliver a training program that will further develop local expertise in the kind of complex investigations sought by CFATF. The Economic Crime Unit will advise on the processes and procedures of the new task force, with a long-term goal of seconding personnel to the local police service.

In addition the local police service has engaged with the UK's National Crime Agency, to arrange for the secondment of personnel to conduct an overall strategic crime threat/risk assessment for the Cayman Islands. This assessment will include an analysis of risk in the financial sector.

Over the next 12 months or so, the Cayman Islands will be implementing the recommendations contained in the CFATF report. The implementation will be monitored by CFATF, as well as the FATF's International Cooperation Review Group, which will issue a report following the 12 month observation period.

Attorney General, Samuel Bulgin, says the regional organisation acknowledges that

the Cayman Islands has a high level of commitment to ensuring their AML/CFT framework is robust and capable of safeguarding the integrity of the jurisdiction's financial sector. Furthermore the AML/CFT regime is complemented by a well-developed legal and institutional framework.

"We believe that this strong foundation, in tandem with a jurisdiction-wide, joined-up approach, will allow us to address the recommendations in a timely manner", Mr Bulgin remarks.

"The history of financial services in the Cayman Islands", Financial Services Minister, Hon. Tara Rivers adds, "shows that Government and the private sector are willing and able to meet changing global standards while maintaining our standing atop the international financial services market."

Agreeing that the Cayman Islands has a strong track record of compliance with international regulations His Excellency the Governor Martyn Roper comments he is pleased the jurisdiction is already demonstrating its commitment to responding effectively to the CFATF recommendations. "I welcome the Cayman Islands' proactive approach and the steps it has already taken. My office will remain closely engaged with this process", Governor Roper states.

"I am particularly pleased that we were able to secure strategic and advisory assistance from both the City of London Police and the National Crime Agency to guide the law enforcement initiatives. This underlines the UK's commitment and support for the Cayman Islands."

Cayman Finance CEO Jude Scott adds: "The Cayman Islands financial services industry's readiness to consistently adopt the highest global standards helped to build our jurisdiction into a premier global financial hub. As such we welcome independent assessments by leading international authorities like CFATF."

"We welcome Government's strong commitment to addressing CFATF's findings. A likewise committed private sector, working alongside and through Cayman Finance, will help to ensure that the Cayman Islands is able to exit the International Cooperation Review Group process at the earliest opportunity afforded to us." An online version of the CFATF report including the recommendations is available from amlu.gov.ky (live as of 18 March).

Agencies, such as DCI, CIMA and FRA have already begun a programme of outreach to all stakeholders and the media. Individuals with questions or who require specific information about the CFATF response should email their supervisor or AMLU@gov.ky. Regular updates on the progress towards full implementation of the action plan will be issued through local media outlets and posted on the AMLU website.

The document is also available as a link from https://www.cfatf-gafic.org/index.php/documents/4th-round-meval-reports.

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.

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