Backdrop: A Stint on the Grey List
Cast your minds back to February 2021 when the Cayman Islands found itself on the Financial Action Task Force's (FATF) notorious "grey list". This is the list where countries must endure increased scrutiny of their Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) frameworks. Out of 63 actions that the Cayman Islands had to initially address, three remained unfulfilled, resulting in this grey list designation.
Dawn Breaks: A Satisfactory Report Card
Fast forward to June 2023, and the mood has lightened considerably. The Cayman Islands has satisfactorily ticked off all recommended actions, presenting a gleaming opportunity for removal from FATF's grey list. This achievement, however, hinges on a crucial onsite visit scheduled for September 2023. FATF assessors will scrutinize the effectiveness and sustainability of the reforms implemented, meeting with local stakeholders to gather crucial insights. The suspense will build until the October 2023 FATF Plenary meeting, where the fate of the Cayman Islands' delisting hangs in balance.
A Silver Lining: The Upsides of Delisting
A successful delisting promises a myriad of benefits for this island nation. It sets the stage for economic expansion and stability, likely attracting a surge in investments and bolstering its position in the international financial arena. The ease in due diligence intensity will also enable smoother and faster transactions for clients, elevating the client experience. Moreover, the delisting is poised to revitalize the Cayman Islands' reputation as a distinguished financial hub, dispelling the apprehension potential clients, businesses, and investors may have harbored.
Ripples of Hope: Impact on EU's High-Risk List
Interestingly, the FATF's grey list designation also saw the Cayman Islands feature on the European Union's (EU) list of high-risk third countries. Given the parallel nature of these lists, it is conceivable that successful removal from the FATF's grey list would also expunge the nation from the EU's list, a potential double-win situation.
The Road Ahead: A Reinvigorated Journey
The Cayman Islands' impending departure from the grey list symbolizes a crucial turning point. It is a testament to the country's unwavering commitment to fortified AML/CFT practices, and propels them on a path of greater economic expansion.
Royal Pine: Your Trusted Advisor
At Royal Pine, we understand the importance of robust AML/CTF compliance programmes for regulated businesses. Our team of AML compliance experts is prepared to assist you with various solutions, including:
- Outsourced Money Laundering Reporting Officers (MLROs) for Cayman Entities and Funds;
- Guidance on navigating AML/CTF regulations;
- Conducting AML reviews and risk assessments;
- Developing internal AML/CTF policies;
- Conducting due diligence on investors and Ultimate Beneficial Owners (UBOs);
- Performing Know Your Customer (KYC) procedures, and
- Conducting background checks on individuals and entities against terrorism financing, money laundering, fraud, and other high-risk activities, as well as PEP and International Sanctions Lists.
* This publication has been prepared as a general guide and for information purposes only. It does not purport to be comprehensive or to render professional advice. Before making any decision or taking any action that may affect you and/or your business, bespoke advice should be obtained.