As of February, the Cayman Islands has been ‘grey listed’ by the Financial Action Task Force (‘FATF’), citing weaknesses in the islands’ AML/CFT regime, particularly in the areas of fines and enforcement actions. FATF defines countries on their grey list as representing a higher risk of money laundering and terrorism financing but who have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies. In response it is anticipated that regulators will classify Cayman Islands as a ‘higher risk’ country, and will automatically fall into scope for enhanced due diligence.
As a trigger event regulated businesses in the Crown Dependencies should perform an impact assessment for any likely implications or actions necessary as a result. Specifically, regulators will require that businesses with connections to the Cayman Islands provide their supervisor with their proposed plan of action and timescales for completion of any required remediation.
As a result, we would expect regulated businesses to:
KPMG’s risk and regulatory specialists are available to help should you need assistance.