The Cayman Islands Terrorist Financing National Risk Assessment (February 2020)

Summary

This is the Cayman Islands' Terrorist Financing National Risk Assessment (TF NRA), published in February 2020 by the Anti-Money Laundering Steering Group (whose members include CIMA, the Financial Reporting Authority, the Police Financial Crime Unit, DCI, the Registrar of Companies, and others). It is an analytical/informational report, not a binding rule, that updates the 2015 National Risk Assessment findings on terrorism financing (TF) following a 2017 CFATF Mutual Evaluation that flagged the jurisdiction's TF risk analysis as insufficiently detailed.

The report concludes that the Cayman Islands presents a low inherent risk for the collection and use of funds domestically for terrorism, but a medium risk for the movement of funds through or via services provided by the jurisdiction, driven by its large cross-border financial flows as an international financial centre. The overall composite TF risk rating given is medium.

• Funds transiting through Cayman via banks/MSBs.
• Regulated service providers facilitating TF without funds entering Cayman.
• Cayman legal entities being abused to channel terrorism funds.

The document also describes mitigating measures already implemented or underway.

• CIMA: New AML/CFT Division and risk-based supervisory framework.
• DCI: Supervisory engagement with dealers in precious metals/stones and real estate.
• VASP regime: A forthcoming VASP regulatory regime.
• Excluded persons: The January 2020 requirement that excluded persons under the Securities Investment Business Law register with and be supervised by CIMA.

This NRA is intended to inform how regulated entities and supervisors apply a risk-based approach to AML/CFT/TF controls, but the document itself does not set out new binding compliance obligations for firms beyond referencing measures separately implemented elsewhere.

Applies to

banks, money service businesses (MSBs), trust and corporate service providers (TCSPs), lawyers, accountants, dealers in precious metals and stones, real estate sector, non-profit organisations (NPOs), virtual asset service providers (VASPs), excluded persons under the Securities Investment Business Law (SIBL-EPs)

Deadlines

• January 2020: From January 2020 onwards, all SIBL excluded persons (SIBL-EPs) must be registered with CIMA, undergo fit and proper assessment, and become subject to full CIMA supervision.