The Cayman Islands government recently updated its Anti-Money Laundering Regulations and these came into force on 2nd October. These regulations are designed to be in line with the Financial Action Task Force’s recommendations of 2012 and their upgrading is part of a larger overhaul of the Cayman Islands’ AML regime, following on from a revamp of the Proceeds of Crime Law which took effect earlier this year. The international law firm of Harneys comments.
The AML Regulations make the following changes to Cayman’s AML regime for anyone who carries out relevant financial business (RFB) in or from the Cayman Islands.
A risk-based approach. The AML Regulations include comprehensive upgrades to the procedures by which firms ought to assess and apply a risk-based approach to money laundering and terrorist financing risks and compliance. This includes a requirement to conduct a business risk assessment of products, practices, delivery mechanisms (data) and new or developing technological risks in accordance with the FATF’s recommendations. The practical application of the risk-rating methodology will be expanded upon in fresh guidelines [“Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands”] which the authorities are expected to issue by the end of the year and which are also expected to include further details of “enhanced due diligence” (EDD) requirements for servicing new technologies, including cryptocurrencies.
Beneficial owners. The AML Regulations delineate specific ways in which firms have...