FATF AML Deficiency List
US Dept of State Money Laundering assessment
Offshore Finance Center
Weakness in Government Legislation to combat Money Laundering
The Cayman Islands is on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement - 25 February 2021
In February 2021, the Cayman Islands made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime. Since the completion of its MER in November 2018, the Cayman Islands has made progress on a number of its MER recommended actions to improve effectiveness, including by updating its AML/CFT national strategy; conducting a TF risk assessment and a number of sectoral risk assessments; amending its Anti-Money Laundering (Amendment) regulation and Proceeds of Crime (Amendment) law; designating AML/CFT regulator for DNFBPs and creating a new Bureau of Financial Investigations for investigating ML. The Cayman Islands will work to implement its action plan, including by: (1) 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; (2) 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 (3) 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.
Compliance with FATF Recommendations
The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Cayman Islands was undertaken in 2021. According to that Evaluation, The Cayman Islands was deemed Compliant for 22 and Largely Compliant for 17 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Cayman Islands is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
The Cayman Islands, a UK overseas territory, is a major international financial center. It is the seventh largest foreign holder of U.S. Treasury securities and the 12th largest holder of international assets and liabilities. As of September 2019, the Cayman Islands had 122 banks; 144 trust company licenses; 144 licenses for company management and corporate service providers; 776 insurance-related licenses; and five MSBs that provide a range of services including: banking, structured finance, investment funds, trusts and company formation, and management. There are 110,451 companies incorporated or registered in the Cayman Islands and 10,937 licensed/registered mutual funds.
The Cayman Islands has an established AML/CFT/counter-proliferation financing regime. The government is committed to strengthening its AML/CFT framework.
EU Tax Blacklist
On 6th October 2020, the Cayman Islands was removed from the EU list after it adopted new reforms to its framework on Collective Investment Funds in September 2020.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index N/A
World Governance Indicator – Control of Corruption 68
With no direct taxation, the islands are a thriving offshore financial center. More than 93,000 companies were registered in the Cayman Islands as of 2008, including almost 300 banks, 800 insurers, and 10,000 mutual funds. A stock exchange was opened in 1997. Nearly 90% of the islands' food and consumer goods must be imported. The Caymanians enjoy a standard of living comparable to that of Switzerland.
Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. Total tourist arrivals exceeded 1.9 million in 2008, with about half from the US.
Agriculture - products:
vegetables, fruit; livestock; turtle farming
tourism, banking, insurance and finance, construction, construction materials, furniture
Exports - commodities:
turtle products, manufactured consumer goods
Imports - commodities:
foodstuffs, manufactured goods, fuels
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