WHAT ARE THE
Money laundering and terrorism financing laws in the Cayman Islands?
- Customer Due Diligence (CDD): Covered entities, including banks, financial institutions, insurance companies, money service businesses, lawyers, accountants, and other designated non-financial businesses and professions (DNFBPs), are required to establish and implement risk-based CDD measures. This includes verifying the identity of customers, obtaining beneficial ownership information, and assessing the risk associated with each customer.
- Enhanced Due Diligence (EDD): In cases where there is a higher risk of money laundering or terrorism financing, covered entities are required to apply enhanced due diligence measures. This may include obtaining additional information, conducting enhanced monitoring, and obtaining senior management approval for high-risk relationships.
- Reporting Suspicious Transactions: Covered entities must report any knowledge, suspicion, or reasonable grounds for knowledge or suspicion of money laundering or terrorism financing to the Financial Reporting Authority (FRA). The reports should be made promptly when suspicion arises.
- Record-Keeping: Covered entities must maintain records of transactions, customer identification information, and supporting documentation for at least five years from the date of the last transaction. These records should be readily available for examination by regulatory authorities.
- Compliance Programs: Covered entities are expected to establish and maintain effective AML/CFT compliance programs. This includes implementing internal policies, procedures, and controls to detect, prevent, and report money laundering and terrorism financing activities. Staff training and regular independent audits are also important components of these programs.
- International Cooperation: The Cayman Islands actively cooperates with international counterparts in combating money laundering and terrorism financing. This involves exchanging information, cooperating on investigations, and providing assistance to other jurisdictions when requested.
WHO ARE THE
ML/TF regulators in the Cayman Islands and what functions do they perform?
- Proceeds of Crime Law (2021 Revision).
- The Anti-Money Laundering Regulations (2020 Revision)
- The Terrorism Law (2020 Revision).
- Cayman Islands Monetary Authority.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
Designated Non-Financial Businesses and Professions (DNFBPs).
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
In the Cayman Islands, the penalties for non-compliance with money laundering and terrorism financing laws can vary depending on the specific offence committed and the provisions violated. Here are some potential penalties that may apply:
- Criminal offences: Serious breaches of anti-money laundering (AML) and counter-terrorism financing (CTF) obligations can be considered criminal offences, leading to criminal charges and potential imprisonment. Criminal penalties can include fines, imprisonment terms, or both, depending on the severity of the offence.
- Monetary Penalties: The Cayman Islands Monetary Authority (CIMA) and other regulatory authorities have the authority to impose monetary penalties on individuals, entities, or institutions for non-compliance with AML/CTF requirements. The specific penalties can vary based on the offence and can include fines.
- Regulatory Actions: Regulatory authorities have the power to take enforcement actions against non-compliant individuals or entities. These actions can include fines, sanctions, suspension or revocation of licences, or other administrative penalties.
WHAT ARE THE
Largest fines for non-compliance with AML/CTF laws?
The largest fines for non-compliance with AML/CTF laws in the Cayman Islands include:
- Cayman National Bank (2019): In 2019, Cayman National Bank, a bank operating in the Cayman Islands, was fined KYD 1.3 million ($1.6 million) by the Cayman Islands Monetary Authority (CIMA) for AML deficiencies. The bank failed to implement adequate policies, procedures, and controls to mitigate money laundering risks.
- Banca del Gottardo (2016): In July 2016, Banca del Gottardo, a Swiss bank operating in the Cayman Islands, was fined KYD 1 million ($1.2 million) by CIMA for AML breaches. The bank did not have proper controls and systems in place to detect and prevent money laundering.