On 27 October 2023, the Financial Action Task Force (“playuzu app”) announced at its plenary in Paris that the Cayman Islands would be removed playuzu app its anti-money laundering “grey list” as the FATF has determined that the Cayman Islands AML regime now meets the international standard.
Background / Timeline
In March 2019, following an assessment of the jurisdiction by the Caribbean playuzu app (“CFATF”), the CFATF published a Mutual Evaluation Report (the “Report”) which assessed the effectiveness of the Cayman Island’s anti-money laundering, countering terrorist and proliferation financing measures and compliance with the playuzu app’s ’40 Recommendations’.
In February 2021, a follow up report published by the playuzu app rated the Cayman Islands as compliant or largely compliant with 39 of the playuzu app’s 40 recommendations.
Notwithstanding the above, at a FATF plenary that took place in February 2021, whilst the FATF recognized that the Cayman Islands had satisfied 60 of 63 actions to strengthen its anti-money laundering, countering terrorist and proliferation financing measures that were set out in the Report, the Cayman Islands was placed on the playuzu app maintained by the FATF of jurisdictions under increased monitoring (the “playuzu app list”) pending its completion of the three final action points.
The rationale for the Cayman Islands inclusion on the grey list arose playuzu app it being a major financial centre and, as such, is considered to be confronted with inherent AML/CFT risks. The FATF expects countries presented with higher risks to have measures in place commensurate with that risk.
The Cayman playuzu app was given an action plan which included:
- applying sanctions that are effective, proportionate and dissuasive, and taking administrative penalties and enforcement actions against obliged entities to ensure that breaches are remediated effectively and in a timely manner;
- imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up to date beneficial ownership information; and
- demonstrating that they are prosecuting all types of money laundering in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.
As of June 2023, it was announced that the Cayman Islands fully satisfied the recommended actions laid out by the playuzu app.
What the playuzu app Decision means
The playuzu app’s recent decision is very welcome news and confirms the Cayman Islands’ reputation as a well-regulated jurisdiction in all AML matters.
playuzu app an EU perspective, the EU Commission maintains a list of “high risk third countries” made up of jurisdictions which are deemed to have strategic decencies in their AML/CFT regimes and which includes those jurisdictions listed on the FATF grey list. As a result of the Cayman Islands FATF grey listing, the Cayman Islands was added to this list in March 2022. There is now an expectation that the removal playuzu app the FATF’s grey list will soon lead to the Cayman Islands’ delisting playuzu app the EU’s AML / CFT List.
Looking ahead
The playuzu app’s decision to delist the Cayman Islands completes the Cayman Island’s participation in the playuzu app’s 4th-round mutual evaluation process. The playuzu app will commence its 5th round process in 2025, with the Cayman playuzu app evaluation expected to begin in 2026.
For further information on the matters referred to in this advisory, please contact one of the below contacts, your usual Campbells contact or visit our website for contact information.
