Terrorist Financing National Risk Assessment (2020-03-13)

Summary

This is a general industry notice from CIMA announcing the publication of the Cayman Islands Terrorist Financing (TF) National Risk Assessment, prepared on behalf of the Anti-Money Laundering Steering Group. The assessment followed on from the 2015 National Risk Assessment and the CFATF Mutual Evaluation Report, and involved a 2019 review of terrorism financing risks facing the jurisdiction.

• Sources used: SWIFT cross-border flow data, trade statistics, suspicious activity reports, MSB statistics, intelligence, criminal investigations, and open-source information.
• Conclusion: The Cayman Islands faces a medium inherent risk of being misused for terrorism financing, a rating that reflects risk prior to the mitigating effect of existing legislative, supervisory and law enforcement controls.

The notice is addressed to licensees and registrants conducting relevant financial business in the Cayman Islands. It does not itself create new legal rules, but reminds firms of their existing obligation under regulation 8(2)(e) of the Anti-Money Laundering Regulations (2020 Revision) to implement senior-management-approved policies, controls and procedures to manage and mitigate risks identified by the country or by the business itself.

• CIMA encourages firms to: review the TF Risk Assessment's findings and typologies, assess how their business models may be susceptible to terrorism financing risks, and strengthen AML/CFT systems and staff training accordingly.

Overall this is an informational/awareness notice tied to an existing regulatory requirement rather than a new standalone obligation-creating instrument; the substantive legal duty referenced (regulation 8(2)(e)) already exists in the AML Regulations.

Key obligations

• Persons carrying out relevant financial business must implement senior-management-approved policies, controls and procedures to manage and mitigate risks identified by the country (including terrorism financing risks identified in the TF Risk Assessment) or by the relevant financial business, per regulation 8(2)(e) of the Anti-Money Laundering Regulations (2020 Revision).
• Licensees and registrants are encouraged (not strictly mandated by this notice) to review the TF Risk Assessment's findings and typologies to assess their business model's susceptibility to terrorism financing and to strengthen AML/CFT systems, controls, policies, procedures and staff training accordingly.

Applies to

licensees, registrants, persons carrying out relevant financial business, banks, TCSPs (trust and corporate services providers), Money Service Businesses