The Cayman Islands Financial Services Association (CIFSA) expressed its concern that despite the efforts of Cayman’s service providers and that of the Regulatory Authority, there remains the failure of certain international financial centres to recognise the Cayman Islands’ Anti Money Laundering (AML) regime.
CIFSA was referring to a recent article in the Cayman Observer newspaper, which said efforts to gain a competitive edge in jurisdictions such as Bermuda, Dubai and Dublin have resulted in difficulties attracting outsourced funds business from the Cayman Islands. CIFSA said without the recognition of Cayman’s AML regime, service providers are required to complete an additional due diligence process, providing an extra regulatory hurdle, when Cayman administrators are outsourcing administrative work to counterparts in other jurisdictions.
“This situation is difficult to understand given that Cayman’s AML framework is among the strongest in the world and is more robust than many onshore countries. When the AML regulations were introduced internationally they were universally to be applied retroactively,” said Eduardo Silva, Chairman of CIFSA.
“Unlike the US and the UK, who considered the exercise not to be too costly, the Cayman Islands complied and undertook the ‘know your customer’ exercise throughout the industry at considerable expense to the service providers.”
Jurisdictions such as Jersey, meanwhile, which have recognised Cayman’s AML framework as equivalent to their own, have seen business grow between the two countries and this is expected to further increase, with Cayman’s market leading position in the hedge funds sector.
“The confidence expressed in Cayman’s customer identification procedures by the jurisdictions that have recognised its equivalency, has resulted in a saving of time and resources for the parties involved and will help bring through more funds business,” Mr Silva said.
Jersey’s recognition of Cayman’s AML regime means that jurisdictions considers Cayman’s framework equivalent to its own and the other countries on its list, which includes all the major developed European nations, as well as the US, Gibraltar, Guernsey, the Isle of Man, Japan and Singapore. “The Cayman Islands is still the only Caribbean jurisdiction that Jersey considers to be equivalent in terms of AML legislation,” Silva said, which is testament to the strength of the regime in the Cayman Islands.”
CIFSA is a not-for-profit association, CIFSA was founded in November 2003 and is funded by its private sector members who currently include Admiral Administration, Appleby, Butterfield Bank, Cayman Management, Cayman National Bank, CIBC Bank and Trust (Cayman), Citi Hedge Fund Services (Cayman), Coutts, Deloitte, Deutsche Bank, DMS Management Ltd., Efg Wealth Management (Cayman), Fidelity Bank (Cayman), FirstCaribbean International Bank, HSBC Financial Services (Cayman), Julius Baer Bank, KPMG, Mourant, Ogier, PricewaterhouseCoopers, Queensgate, Rawlinson and Hunter, Royal Bank of Canada, Scotia Bank & Trust, Sul America International Bank, Walkers, Wilmington Trust Cayman, and Young and Young CPA.