Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands (2020 Revision)

Summary

This is CIMA's consolidated Guidance Notes (2020 Revision) on preventing and detecting money laundering, terrorist financing and proliferation financing (AML/CFT) in the Cayman Islands, issued under section 34 of the Monetary Authority Law. It replaces the December 2017 Guidance Notes and related amendments, and sets out CIMA's expectations for how all persons conducting 'relevant financial business' under the Proceeds of Crime Law should implement and operate AML/CFT frameworks consistent with the Anti-Money Laundering Regulations (AMLRs) and FATF standards.

The document is guidance, not law itself, and where it conflicts with statute, the statute prevails. However, courts and Supervisory Authorities may have regard to it when assessing whether a firm has complied with the AMLRs, and non-compliance may be treated as a basis for enforcement action.

Part II: General AML/CFT Requirements

• Risk assessment and the risk-based approach
• Customer due diligence (CDD), including simplified and enhanced due diligence
• Politically exposed persons
• Record-keeping
• The role of the Money Laundering Reporting Officer (MLRO)
• Other internal controls
• Wire transfer identification and record-keeping
• Correspondent banking
• Sanctions compliance
• Counter-proliferation financing
• Targeted financial sanctions
• Ongoing monitoring

Parts III-IX: Sector-Specific Guidance

• Banks and deposit-taking institutions (including credit unions and building societies)
• Fiduciary services (company formation and trusts)
• Insurance business and insurance managers
• Mutual funds and fund administrators
• Money services businesses and other regulated/unsupervised lenders
• Securities investment businesses
• Virtual asset service providers (VASPs)

The Notes also include appendices with model forms (e.g., eligible introducer assurance form, verification of customer identity request, internal suspicious activity report form) and examples of unusual or suspicious transaction indicators to assist FSPs in staff training and internal reporting.

Key obligations

• FSPs must establish and maintain an AML/CFT compliance programme, systems, and staff training consistent with the AMLRs and this guidance.
• FSPs must conduct and document a risk assessment of their business and apply a risk-based approach to AML/CFT controls.
• FSPs must perform customer due diligence (CDD) on new business relationships, existing customers, and one-off transactions, and apply simplified or enhanced due diligence measures as appropriate to the customer's risk profile.
• FSPs must apply enhanced due diligence measures to politically exposed persons (PEPs).
• FSPs must maintain records in accordance with the record-keeping procedures described in the guidance.
• FSPs must appoint a Money Laundering Reporting Officer (and deputy) and maintain internal reporting procedures for suspicious activity.
• FSPs must maintain identification and record-keeping procedures for wire transfers and apply enhanced scrutiny to correspondent banking relationships.
• FSPs must implement sanctions compliance and counter-proliferation financing controls, including screening against targeted financial sanctions lists.
• FSPs must conduct ongoing monitoring of business relationships and transactions.
• FSPs should also apply the sector-specific guidance relevant to their business type (e.g., banks, fiduciary services, insurance, mutual funds, MSBs, securities investment business, VASPs).

Applies to

Financial Service Providers (FSPs) conducting relevant financial business under the Proceeds of Crime Law, Retail and non-retail banks, Credit unions, Building societies, Company formation and management providers (fiduciary services), Trust companies, Insurance business providers, Insurance managers, Mutual funds and mutual fund administrators, Money services businesses, Cayman Islands Development Bank, Unsupervised lenders, Securities investment businesses (SIBs), Virtual asset service providers (VASPs)

Related documents

• This document is made under Monetary Authority Law (2020 Revision)