|
|
Sanctions:
None applicable.
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
The Cayman Islands, a United Kingdom (UK) Caribbean overseas
territory, is an offshore financial center. Most money laundering
that occurs in the Cayman Islands is primarily related to fraud and
drug trafficking. Due to its status as a zero-tax regime, the
Cayman Islands is also considered attractive to those seeking to
evade taxes in their home jurisdictions.
The Cayman Islands is home to a well-developed offshore
financial center that provides a wide range of services, including
banking, structured finance, investment funds, various types of
trusts, and company formation and management. As of December
2010, the banking sector had $1.73 trillion in assets. There were
approximately 250 banks, 150 active trust licenses, 730 captive
insurance companies, nine money service businesses, and more
than 85,000 companies licensed or registered in the Cayman
Islands. According to the Cayman Islands Monetary Authority, at
year end 2010, there were approximately 9,000 registered mutual
funds, of which 435 were administered and 133 were licensed.
Shell banks are prohibited, as are anonymous accounts. Bearer
shares can only be issued by exempt companies and must be
immobilized.
Gambling is illegal; and the Cayman Islands do not permit the
registration of offshore gaming entities. There are no free trade
zones, and the authorities do not see risks from bulk cash
smuggling related to the large number of cruise ships that dock at
the island.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, trust companies, investment funds,
fund administrators, insurance companies and managers, money
service businesses, corporate and trust service providers, money
transmitters, dealers of precious metals and stones, and the real
estate industry
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 353 between April
2010 and March 2011.
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks, trust companies, investment funds,
fund administrators, insurance companies and managers, money
service businesses, corporate and trust service providers, money
transmitters, dealers of precious metals and stones, and the real
estate industry
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Eight between 2003 and 2010
Convictions: One since 2006
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
The Cayman Islands is a member of the Caribbean Financial
Action Task Force (CFATF), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.cfatf-gafic.
org/downloadables/mer/Cayman_Islands_3rd_Round_MER_(Final)
_English.pdf
Enforcement and implementation issues and comments:
While the Cayman Islands has increased both its regulatory and
law enforcement staffing, the number of prosecutions and
convictions is extremely low given the vast scale of the country’s
financial sector; only six successful prosecutions for money
laundering, and only one conviction in the last four years.
International reporting suggests agents for private trust
companies and individuals carrying on trust businesses may not
consistently maintain identity and ownership information for all
express trusts for which they act as trustees. In addition, there
remains a lack of penalties for failing to report ownership and
identity information, which undermines the effectiveness of
identification obligations. This is a particular problem for an
estimated 3,000 unregulated mutual funds resident in the Cayman
Islands. There also is a need to pay greater attention to the risks
and proper supervision of non-profit organizations.
The Cayman Islands continues to develop its network of exchange
of information mechanisms. Since 2010, the Cayman Islands has
signed a further five tax information exchange agreements, with
Canada, Mexico, Japan, India and South Africa, which meet the
international standard. It now has a network of 24 information
exchange agreements, with 12 of those already in force.
The Cayman Islands is a United Kingdom (UK) Caribbean
overseas territory and cannot sign or ratify international
conventions in its own right. Rather, the UK is responsible for the
Cayman Islands’ international affairs and may arrange for the
ratification of any Convention to be extended to the Cayman
Islands. The 1988 Drug Convention was extended to the Cayman
Islands in 1995 and is implemented through several laws. The UN
Convention against Corruption and the UN Convention against
Transnational Organized Crime have not yet been extended to
the Cayman Islands. However, the full implementation platform for
the anti-corruption convention exists under current Cayman law. A
2002 request for extension of the International Convention for the
Suppression of the Financing of Terrorism to the Cayman Islands
has not yet been finalized by the UK, although the provisions of
the Convention also are implemented by domestic laws.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
US State Dept Trafficking in Persons Report 2011
(introduction):
No report available
US State Dept Terrorism Report 2009
No report available
____________________________________________________
AML News / Updates
October 10, 2010 - The Global Forum on Transparency and
Exchange of Information for Tax Purposes has issued a phase
one peer review for Cayman Islands
View Review.....
Links:
Worldwide AML Legislation (International Bar Association)
Financial Reporting Authority (CAYFIN)
None applicable.
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
The Cayman Islands, a United Kingdom (UK) Caribbean overseas
territory, is an offshore financial center. Most money laundering
that occurs in the Cayman Islands is primarily related to fraud and
drug trafficking. Due to its status as a zero-tax regime, the
Cayman Islands is also considered attractive to those seeking to
evade taxes in their home jurisdictions.
The Cayman Islands is home to a well-developed offshore
financial center that provides a wide range of services, including
banking, structured finance, investment funds, various types of
trusts, and company formation and management. As of December
2010, the banking sector had $1.73 trillion in assets. There were
approximately 250 banks, 150 active trust licenses, 730 captive
insurance companies, nine money service businesses, and more
than 85,000 companies licensed or registered in the Cayman
Islands. According to the Cayman Islands Monetary Authority, at
year end 2010, there were approximately 9,000 registered mutual
funds, of which 435 were administered and 133 were licensed.
Shell banks are prohibited, as are anonymous accounts. Bearer
shares can only be issued by exempt companies and must be
immobilized.
Gambling is illegal; and the Cayman Islands do not permit the
registration of offshore gaming entities. There are no free trade
zones, and the authorities do not see risks from bulk cash
smuggling related to the large number of cruise ships that dock at
the island.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks, trust companies, investment funds,
fund administrators, insurance companies and managers, money
service businesses, corporate and trust service providers, money
transmitters, dealers of precious metals and stones, and the real
estate industry
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 353 between April
2010 and March 2011.
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks, trust companies, investment funds,
fund administrators, insurance companies and managers, money
service businesses, corporate and trust service providers, money
transmitters, dealers of precious metals and stones, and the real
estate industry
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Eight between 2003 and 2010
Convictions: One since 2006
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
The Cayman Islands is a member of the Caribbean Financial
Action Task Force (CFATF), a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.cfatf-gafic.
org/downloadables/mer/Cayman_Islands_3rd_Round_MER_(Final)
_English.pdf
Enforcement and implementation issues and comments:
While the Cayman Islands has increased both its regulatory and
law enforcement staffing, the number of prosecutions and
convictions is extremely low given the vast scale of the country’s
financial sector; only six successful prosecutions for money
laundering, and only one conviction in the last four years.
International reporting suggests agents for private trust
companies and individuals carrying on trust businesses may not
consistently maintain identity and ownership information for all
express trusts for which they act as trustees. In addition, there
remains a lack of penalties for failing to report ownership and
identity information, which undermines the effectiveness of
identification obligations. This is a particular problem for an
estimated 3,000 unregulated mutual funds resident in the Cayman
Islands. There also is a need to pay greater attention to the risks
and proper supervision of non-profit organizations.
The Cayman Islands continues to develop its network of exchange
of information mechanisms. Since 2010, the Cayman Islands has
signed a further five tax information exchange agreements, with
Canada, Mexico, Japan, India and South Africa, which meet the
international standard. It now has a network of 24 information
exchange agreements, with 12 of those already in force.
The Cayman Islands is a United Kingdom (UK) Caribbean
overseas territory and cannot sign or ratify international
conventions in its own right. Rather, the UK is responsible for the
Cayman Islands’ international affairs and may arrange for the
ratification of any Convention to be extended to the Cayman
Islands. The 1988 Drug Convention was extended to the Cayman
Islands in 1995 and is implemented through several laws. The UN
Convention against Corruption and the UN Convention against
Transnational Organized Crime have not yet been extended to
the Cayman Islands. However, the full implementation platform for
the anti-corruption convention exists under current Cayman law. A
2002 request for extension of the International Convention for the
Suppression of the Financing of Terrorism to the Cayman Islands
has not yet been finalized by the UK, although the provisions of
the Convention also are implemented by domestic laws.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
US State Dept Trafficking in Persons Report 2011
(introduction):
No report available
US State Dept Terrorism Report 2009
No report available
____________________________________________________
AML News / Updates
October 10, 2010 - The Global Forum on Transparency and
Exchange of Information for Tax Purposes has issued a phase
one peer review for Cayman Islands
View Review.....
Links:
Worldwide AML Legislation (International Bar Association)
Financial Reporting Authority (CAYFIN)
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| CAYMAN ISLANDS |
| KnowYourCountry |
|
|
| Last Updated: 16 April 2012 |