Removal from grey list a step away
The Cayman Islands has moved another step closer to being removed from the Financial Action Task Force’s (FATF) Monitoring List, often referred to as its grey list.
In October 2022 in Paris, FATF acknowledged that Cayman has now satisfied another of its recommended actions. This means the jurisdiction has now satisfied 62 of the 63 recommended actions.
The meeting in Paris recognised the steps taken by Cayman to improve its Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime. An important part of this was illustrating it will impose “adequate and effective sanctions” against entities (companies or individuals) who do not file accurate and up-to-date beneficial ownership information in line with requirements.
Cayman must only now demonstrate that it is willing to prosecute all types of money laundering cases in line with the jurisdiction’s risk profile. Its progress in this regard will next be assessed at the next FATF Plenary meeting in February 2023.
Fulfilling the requirements of the FATF is important for another reason. Delisting from the grey list would also trigger removal from the EU’s AML/CFT list, something the Cayman Islands Government has acknowledged is now “within range”.
Cayman secures highest AEOI rating
The Cayman Islands has secured the highest possible rating for the effectiveness of its Automatic Exchange of Financial Account Information (AEOI) regime, according to a recent independent review.
In November, the Organisation for Economic Co-operation and Development’s (OECD) Global Forum published its Peer Review of the Automatic Exchange of Financial Account Information 2022.
The review represented the first peer review awarding effectiveness ratings to 99 countries and jurisdictions that had committed to starting AEOI in 2017 or 2018.
The report found that the Cayman Islands has put in place the necessary legal frameworks and is successfully exchanging information without significant timing or technical issues. It was awarded the highest possible rating.
The Peer Review said the Cayman Islands:
- Has worked effectively to understand its population of financial institutions, including relevant non-regulated entities
- Is taking action to ensure that reporting financial institutions are classifying themselves correctly and reporting information as required
- Has conducted a significant number of desk-based reviews of reporting financial institutions
- Has commenced its procedures to apply administrative penalties in a significant number of cases
- Annual reviews, investigations and other enforcement measures, including administrative fines, are anticipated to continue into the future.