Cayman gears up for CFATF review

| 07/11/2017 | 0 Comments

(CNS Business): The attorney general has said that the Portfolio of Legal Affairs, the Ministry of Financial Services and CIMA have been working with the public sector agencies and private sector stakeholders to get the jurisdiction in a state of readiness for the upcoming evaluation by the Caribbean Financial Action Task Force (CFATF) Mutual Evaluation examiners. The team will be in the Cayman Islands in early December to assess the jurisdiction’s efforts in combating money laundering and terrorist financing. Cayman will be hoping to demonstrate that it is in compliance with the CFATF’s 40 recommendations and, importantly, the effectiveness of that compliance.

It will be an important time for Cayamn’s offshore sector, and although Attorney General Samuel Bulgin believes Cayman is ready for the evolution, there are still some holes in the compliance regime that may give some cause for concern. While Wayne Panton, the former financial service minister, was able to amend and steer through copious amounts of legislation during the last administration to plug gaps, the failure of the parliament to agree to a legal practitioners law could undermine the result.

During the two-week visit, the assessment team is scheduled to meet with representatives from all relevant public sector competent authorities involved in anti-money laundering and combatting the financing of terrorism (AML/CFT), as well as with private sector representatives from the various financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs). These include attorneys, dealers of precious metals and stones and real estate dealers. Meetings with FIs and DNFBPs will focus particularly on the AML/CFT measures they have been implemented that would demonstrate effectiveness.

“Of critical importance is the extent to which these stakeholders have assessed their own money laundering risks or vulnerabilities, taking into consideration the results of the 2015 Cayman Islands National Risk Assessment Relating to Money Laundering, Terrorism Financing and Proliferation Financing and the extent to which FIs and DNFBPs are taking mitigating measures commensurate with their risks, ” the attorney general stated in a release.

This includes having documented policies and procedures in place that are in line with the Anti-Money Laundering Regulations, 2017; and supporting information and data to demonstrate that robust AML/CFT procedures are being carried out.

The third round report, which took place in 2007, found that Cayman had a strong compliance culture, and Bulgin stated that the country has recalibrated its AML/CFT regime accordingly since then, which resulted in “substantial changes …to the legal and institutional framework”.

Once the review is completed, the assessment team will produce a series of draft reports of the Cayman Islands Mutual Evaluation Reports (MERs) for review and refinement prior to its eventual adoption by the CFATF Plenary in November 2018.

Once published, it is expected that the MER will validate the jurisdiction’s strengths in combatting money laundering and terrorist financing. It will also make recommendations of areas for further improvement.

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Category: Finance, Financial Crime

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