AML/CFT Activity Report 2021

Summary

This is CIMA's Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) Activity Report for 2021, a retrospective publication summarizing the Cayman Islands Monetary Authority's AML/CFT supervisory work during that year. It is not a new rule or regulation, but a statistical and thematic overview covering onsite inspections, deficiencies found, enforcement actions, beneficial ownership reviews, and virtual asset service provider (VASP) supervision.

The report describes CIMA's risk-based supervisory approach across sectors including banking, trust and corporate services providers (TCSPs), insurance, securities, mutual funds, mutual fund administrators, money services businesses, and VASPs.

• Onsite inspections: 161 AML/CFT onsite inspections were conducted in 2021.
• Requirements issued: 1,915 requirements were issued, including 1,698 'matters requiring immediate attention'.
• Administrative fines: Three administrative fines were levied, totaling over CI$4.5 million.
• Enforcement actions: 1,365 total enforcement actions were recorded.

• Recurring deficiency themes: Weaknesses in CDD/KYC procedures.
• Weaknesses in risk-based approach implementation.
• Weaknesses in internal controls.
• Weaknesses in sanctions screening.
• Weaknesses in policies/procedures.

Beneficial Ownership Compliance

A notable section covers beneficial ownership compliance by TCSPs, referencing a 2020 thematic review and a January 2022 follow-up review showing improved compliance rates.

VASP Supervisory Activity

The report also outlines CIMA's VASP supervisory activity, noting that under the VASP Act (2020), entities engaged in virtual asset services were required to apply for registration by 31 January 2021. It reports on CIMA's 'policing the perimeter' efforts against unregistered VASP activity, including use of information-gathering directions under Section 34(8) of the Monetary Authority Act.

Because this document is a backward-looking activity report rather than a binding instrument, it does not itself create new compliance obligations. It references existing obligations under the Anti-Money Laundering Regulations (AMLRs), the VASP Act, and the Monetary Authority Act, and illustrates how CIMA enforces them.

Key obligations

• Entities engaged in or intending to engage in virtual asset services were required to file applications for Registration with CIMA by 31 January 2021 under the VASP Act (2020) (historical deadline referenced in the report).
• Regulated entities must maintain AML/CFT compliance frameworks (programme, CDD/KYC, internal controls, risk-based approach, policies and procedures, sanctions screening, training, record keeping) in accordance with the Anti-Money Laundering Regulations, as reflected in CIMA's ongoing supervisory expectations described in the report.
• TCSPs must obtain and maintain adequate, relevant and up-to-date beneficial ownership and CDD information in compliance with Regulation 12 of the AMLRs.

Applies to

Banks and Trusts, Money Services Businesses, Trust & Corporate Services Providers, Insurance Licensees, Mutual Funds, Private Funds, Mutual Fund Administrators, Securities Licensees and Registered Persons, Virtual Asset Service Providers

Deadlines

• 31 January 2021: Deadline (referenced retrospectively) by which entities engaged in, or intending to engage in, virtual asset services were required to file applications for Registration with CIMA under the VASP Act (2020).