Cayman Islands placed on terror financing watch list
The Financial Action Task Force (FATF), an international agency that monitors terrorism funding and is responsible for setting the global standard for Anti-Money Laundering(AML), has added the Cayman Islands, Morocco, Burkina Faso, and Senegal and to its watch or 'gray' list, for increased monitoring.
The Cayman Islands is a member of the Caribbean Financial Action Task Force (CFATF), a regional body that monitors Caribbean member countries’ compliance with FATF standards on behalf of the FATF. The watch list currently has 19 countries and territories that FATF said are only partially fulfilling international rules for fighting terrorism financing and money laundering.
The decision was made during a plenary session that took place this week and was delivered at a press conference on Thursday.
The CFATF's 63 recommended actions for the Cayman Islands AML regime, in its published March 2019 4th round Mutual Evaluation Report recommended that the Cayman Islands meet those recommendations by the end of its recently concluded Plenary.
According to the FATF, "jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing."
The "Anti-money laundering and counter-terrorist financing measures the Cayman Islands Mutual Evaluation Report" indicated that "The Cayman Islands has, to a fair extent, identified, assessed and understood aspects of its ML/TF risks. While corruption, fraud, evasion of taxes, and narcotics trafficking were identified as foreign ML threats, there was too much focus on the domestic risk and not enough on the international risks."
The report went on to say that "The jurisdiction did not conduct a sufficiently comprehensive assessment and analysis of its risk environment within the context of its role as a significant financial center both regionally and globally."
According to the Government, "the Cayman Islands has been adjudged [by the FATF] to have satisfactorily completed 60 of 63 recommended actions to strengthen its AML/CFT (anti-money laundering, combatting the financing of terrorism and proliferation) regime."
The agency has thus provided an action plan for the Cayman Islands to finalize work on the three remaining actions in the next 15 months. The Cayman Islands Government has given the jurisdiction’s commitment to satisfying the plan’s requirements and notes that, in any event, this work was already underway.
Premier Hon. Alden McLaughlin said, “The three remaining recommended actions are about the continuing effectiveness of our legal framework, in terms of compliance and enforcement in detecting and deterring financial crime, and recent work by our agencies substantiates our progress in these areas.”
For many years, Government and Cayman’s private sector have worked together to address the ever-evolving local and global risk of financial crime,” he continued. “As a result, today’s FATF report recognizes that overall, our AML/CFT/CPF framework is fairly robust in fighting these crimes.
The Cayman Islands’ Attorney General, the Hon. Samuel Bulgin, QC, who is also chairman of the Cayman Islands Anti-Money Laundering Steering Group (AMLSG) described the country’s response to the recommended actions as robust.
Before the CFATF report in March 2019, our public and private sectors continued to address the FATF standard through updated legislative, regulatory, and law enforcement measures,” Mr. Bulgin commented. “Government’s commitment today reaffirms the priority that the Cayman Islands continues to place upon meeting global AML standards.”
While the action plan for the Cayman Islands focuses on the effectiveness of its AML regime, the Attorney General also noted that the jurisdiction’s excellent outcome with regards to technical compliance due to a modernized legislative framework.
The Cayman Islands is now compliant or largely compliant with 39 of the 40 FATF Recommendations.
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