Cayman on FATF ‘grey list’ over AML compliance
(CNS): The Cayman Islands has fallen short of the necessary compliance standards and will be under increased observation by the Financial Action Task Force until it fulfills the requirements relating to its international financial obligations. Cayman has been added to the FATF’s grey list because of the failure by the authorities here to enforce the anti-money laundering and beneficial ownership regime and to penalize breaches.
At an online press briefing on Thursday, Dr Marcus Pleyer, the current president of FATF, explained why Cayman had wound up on the list and is now facing this increased level of monitoring. He said that strategic deficiencies had been identified during the mutual evaluation.
“These deficiencies are… in the area of sanctions on financial institutions for anti-money laundering breaches,” Pleyer said, which was the first area where Cayman must improve. The second was with regard to beneficial owners. “They must show that they penalize those that don’t show accurate up to date beneficial ownership information,” the president added.
Pleyer described these as two crucial issues and FATF expected higher risk countries such as the Cayman Islands, which is a major financial centre, to have “commensurate measures” in place against these risks.
The FATF’s grey list includes just 18 other countries, the Cayman Islands being the only overseas territory on the list.
The Cayman Islands will now be required to work to implement an agreed action plan, applying sanctions that are effective, proportionate and dissuasive, and taking administrative penalties and effective enforcement actions in a timely manner. Cayman will also be required to impose adequate and effective sanctions to deal with inadequate beneficial ownership information and to demonstrate prosecutions against all types of money laundering in line with the jurisdiction’s risk profile.
In a press release, government officials said it was found to have met 60 out of 63 recommended actions but it was required to work with FATF now to swiftly address the outstanding deficiencies, which has provided an action plan for the Cayman Islands.
Premier Alden McLaughlin played down the gaps identified and said that Cayman was making progress, but it is clearly a major issue that the next government will need to address to avoid reputational damage.
“The three remaining recommended actions are about the continuing effectiveness of our legal framework, in terms of compliance and enforcement in detecting and deterring financial crime, and recent work by our agencies substantiates our progress in these areas,” he said. “For many years, government and Cayman’s private sector have worked together to address the ever-evolving local and global risk of financial crime.”
The Caribbean Financial Action Task Force (CFATF), the regional body that monitors Caribbean members, published 63 recommended actions for Cayman two years ago and it has largely complied with them.
Attorney General Samuel Bulgin, who is the chairman of the Cayman Islands Anti-Money Laundering Steering Group, argued that the country’s response has been robust. “Prior to the CFATF report in March 2019, our public and private sectors continued to address the FATF standard through updated legislative, regulatory and law enforcement measures,” he said. “Government’s commitment today reaffirms the priority that the Cayman Islands continues to place upon meeting global AML standards.”
Meanwhile, according to the Caribbean Financial Action Task Force Review, Cayman has also seen its compliance regarding its virtual asset regime downgraded from largely compliant to only partially compliant.
Category: Business, Financial Services
It’s hard to counter entrenched, institionalised hatred like the EU’s, but the truth is we really don’t help ourselves.
Here are a few things we could improve:
1. Our relationship with the EU. We have no presence there and we know nobody there; and we are too idle or arrogant to do anything about it. Our competitors have permanent offices in Brussels, but invariably we , the great Cayman Islands, the “foremost offshore jurisdiction”, roll up there only when it’s too late and the sh*t has already hit the fan.
2. When we do bother to turn up, our delegation is hopelessly underqualified. The best our politicians can muster are a couple of ex lawyers and an ex accountant, all inadequately briefed because they simply refuse to lose face by asking help from the private sector, and necessarily out of date on current issues. And on the civil service side, an attorney general who is patently out of his depth since his only qualifications that he was once a criminal lawyer in Jamaica. No doubt a good one, but it’s like asking a bicycle mechanic to peer under the hood of a Maserati.
3. Consult those practitioners in the private sector who actually deal with the issues on a day by day basis. And by private sector I don’t mean the politicians’ favorite big-firm accountants or dinosaur big-name lawyers or ex lawyers or Cayman Finance; they are all as ineffective as they are vocal. I mean young technical lawyers and (maybe) accountants who know the points and know the arguments for and against them. Government might not know who they are, but they know perfectly well who to speak to to find them.
At present, what do our poor inadequate representatives do when faced by the demands of the massive, clever, heavily resourced and venomous institutions of the EU? Certainly not raise basic, common sense questions about WHY they are making such demands. Instead we simply say reply ok, how far do you want us to bend over?
That has to stop, or believe me, we WILL go under.
Our problem with the EU has now been magnified by BREXIT.
However, the EU is cracking down on sophisticated money laundering from Russia and China and whether we like it or not we are indirectly linked to this through real estate development here in Cayman.
Our relationship with the USA is about to become more difficult as a result of Robert Brockman, the American billionaire behind the largest American tax fraud case ever filed by the American Justice Department. He hid his billions illegally in the Cayman Islands and now Uncle Sam is coming. There is a big story today about this case in the Wall Street Journal.
Troubles ahead for us with America.
You seem rather over-excitable. His offshore connections appeared to be 90% Bermuda, 10% Cayman and others.
These FATF, AML or whatever they decide to call themselves this week are all a bunch crooks.
Everydayvthey changing rules, Regs, Laws or whatever just to suit their greedy dirty little pockets.
They are pissed because in reality the money comes here in an dffort to avoid having to give it to their bank accounts under the guise of Taxes, Regulatory fees, permits and licenses ect….
They want free money and dont want to wofk hard for it.
No matter what any nation with a banking system, such ad Cayman, does it will never stop and we will never come off any so calkedist the produce.
Its all about sho gets free money. Ain and simple.
These so called sophiticated nations are really just money grabbing bufons.
Stop cowing down to them. Investigate and release the dirty shit they do. Embarrass they ass publicly and this bulkshit stops.
They say to be prim and proper so as to not rock the boat but they keep trying to destroy nations.
To hell with that. Let em have it and release all their dirt.
I usually agree that the international watch dogs are conflicted and unevenly influenced by certain jurisdictions….however in this case they are totally accurate. We’ve had weak regulators for decades and have chosen the route of the 3 wise monkeys (see hear speak no evils) instead of compliance. While we may chose our head in the sand, the international community will not for Cayman activities….US sure…but Cayman no.
Crooks in suits.
This is why permanent residents should be able to vote and run government. With the people in charge we will never have capable regulators or politicians that meet international standards . The cayman civil service ignore emails and go home at 5 every day,
Bullshit. Get your own country.
The Cayman Islands are not a country but simply a colony.
The island has had years and spent millions on consultants and we clearly haven’t listened and still on the Grey list.
Some heads need to role from the top starting with the appointed national coordinator
The national co-ordinator needs to be replaced as a matter of urgency.
EU Blacklist soon come
who cares
Reputable financial institutions around the world will stop sending money through Cayman based financial instruments. Little by little business in the sector will dry up. Isn’t financial services a main pillar in Cayman”s economy? Saying “who cares” shows us all how incredibly bright you are.
FYI: the FATF Grey List member Nations are:
Cayman Islands, Morocco, Burkina Faso, Senegal, Albania, Barbados, Botswana, Cambodia, Jamaica, Mauritius, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe.
If commentators don’t think this risk re-categorisation won’t have a serious impact on our ability to send and receive money, clear and settle trades, and perform normal financial industry functions, then they are living on another planet.
Fake organization.
Which every major financial institution on the planet pays very careful attention to when moving funds. So at a strike it’s now procedurally harder to move funds through Cayman entities than rival structures set up in BVI or Bermuda. – thanks guys.
Hahaha!
“World Class Civil Service”. I also think that the Deputy Governor should have a time limit. No more than two terms.
This merely shows while our regulations are sufficient our regulator is not. CIMA is WEAK! and always has been…..most of prior actions are not initiated but required following another jurisdiction. The previous offenders are allowed to carry on with new financial ventures weather it be funds, trusts, or even recently retail brokerages. Our regulator has always been our weakest link.
Well said. I work all hours in March to help drive the financial sector which is 80 per cent of cayman economy but the government are useless
Time to stop trying to please these people and be who we really are- the pirates of the Caribbean!
11:42 – yes.. and go back to growing bananas and making coconut leaf hats!
We might be on a grey list, but at least we’re not on anybody’s rainbow list – that would be a major crisis for our government, especially Anthony Eden.
Be careful, you can get beaten in public for a statement like that. And you can bet the baterrer will likely be a public figure who will receive no punishment for the beating.
I have even less respect for Tara now (if that is even possible).
1. Her seat was not at stake because she knew she was resigning yet still did not have the spine to condemn the woman beater.
2. She did not do her job and now we are yet again blacklisted.
More concerned about the LGBT community getting equal rights than saving the country’s financial reputation. Big Big Failure!!!
When you’re accustomed to privilege, equality feels like oppression.
~ Franklin Leonard
Oh would you stop trying to blame Minister Rivers for everything. Geez, the obvious politically driven hating is exhausting!
I think you’ll find it happened in her Ministry on her watch. In my books that makes it her fault.
Well she is / was the Financial Services Minister. But in the Cayman Government there is zero political accountability. A total disgrace.
I agree. The know-all personality-based politics on this island are truly tiresome. It’s like being back in junior high, except that there the haters didn’t hide behind anonymity. Show some maturity, you child.
These lists are published year after year regardless of accuracy or truth. Which minister has managed a full term in office without having to face a new one?
CNS: your last paragraph is disingenuous. Why mention that the CI have been downgraded on 1 area without mentioning that at the same time we have received upgrades in 15 areas (out of 16 areas assessed there was 1 downgrade and 15 upgrades)
You need a new AG. Bulgin is past his sell by date. His abilities no longer match the requirements of his job. Supervising successful prosecutions is now a necessity. This isn’t only on the DPP.
The notional metric used by the FATF is the ratio of volume of economic flows vs convictions for AML offences, that and the fact that we are still in business. Seems like the best option is to import a bunch of patsies and then lock them up. However, if we do that the FATF will simply change the metric again as long as we are in business.
What does Bermuda and the British Virgin Islands know that we have still not discovered?
There is no excuse. They can do it but we cannot. What is wrong with our picture?
The self appointed FATF is a joke. Most countries a party to this club do not have BO information. This organization is a scam. Being a common law jurisdiction should place us far above the civil law countries.
Too bad our French friends didn’t have the nuts to aim this policy at the true targets during the late 80s and early 90s.
Would have saved the French and the rest of the world trouble with terrorist cells today.
Wow we are right there with Zimbabwe and Syria and Albania Yemen they don’t have functioning banking system Ras man only one missing from this list of Rogues is DRPK North Korea ! Boy Tara you left us a real pile of $#@% but yet our all protecting mother is sucking off the tit and playing mind games with our political menaces and idiots like Our so called finance minister and premier who are nothing but employment pit bosses and PR prostitutes selling Cayman to low level foreign pimps to come and rape pillage what little we have left. No wonder their cozying up to Dart so tight. since that is the case why don’t we start packing their parasitic citizens back to Europe to nurse on their locked down welfare states . This nothing short of an extortion scheme to pay for their horrendous failures during this pandemic .You watch now they will be setting up some fund to put these financial fines and penalties so they can tap into to pay their fricking mounting health and economic bills. We paying for Brexit Cayman that’s all. It’s time to lessen our load send Marcus Player a get well card ! C@c%$uc%€R$
You have some serious grievance issues. Seek professional help or a spliff.
Good its exactly where we should be. Bunch of crooks is all we have here. Tom, dick n harry can come here and set up shop buy a condo and that bomb money us flowing into that bank account.
We will never satisfy these people until we are out of business. Seems clear to me.
Tara Rivers did not do her job as Minister. A failure.
Duh
She will now hop over to the financial services industry and make more money than many can dream of. That’s how it works on the Christian islands…
Bermuda and British Virgin Islands can do it but we can’t. Why? Ask Tara. We deserve an answer.
BVI has not gone through the assessment yet. Bermuda did very well but their banking se for and number of companies in their registry is a fraction of ours
9:15, Caymanians always have an excuse.
9:15, Yes, but Cayman has 5 times more people doing financial services regulation than Bermuda. What have our people been doing the past year?
Our problem isn’t a lack of hastily-gazetted laws for optical purposes, it’s that they see no meaningful application, enforcement, and there are no conviction examples to counter libraries of real and disturbing Cayman-based fraud. Nothing has changed on that front – assisted by McKeeva’s AG appointee from 2003 coup. I’m glad that the FATF is grabbing us by the shoulders and finally shaking us awake – will we listen, see, and act before we graduate to the no-fly list? What kind of government are we going to collectively tolerate?
A few convictions for fraud and money laundering would certainly get the EU off our back. We have such bad optics.
We still haven’t shut down the CEC SEZ – the source of a dozen headline pump and dump, ICO, and blockchain frauds…
Add gold smuggling and valuable asset repository. With the latter being completely off the radar of CIMA since they are technically out of jurisdiction.
Great job Tara – two sanction lists in your closing 6 months – you must be so proud.
All we had to do was show that the laws and regulations we had put in [place were actually enforced, but it was just too hard. Government didnt realise that passing some shiny laws wasnt enough – they actually had to enforce them. We seem to be really good at creating laws, really bad at applying them. Whether its enforcing anti money laundering laws, election bribery, quarantine breach, planning requirements, even access to beaches… its almost as if we have it hardwired into our culture.
Unfortunately it is hard wired into Cayman culture. As a peoole you forgive far too easy, you fail to hold to account and you accept trangressions. The Bush saga would have resulted in a resignation in any other developed economy. Similarly the recent Seymour case. But those two men have been raised in a culture where dignity, integrity and personal responsibility do not mean anything. From every day actions you see on the streets, like kids pulling wheelies on motorbikes, the terrible driving standards, drunk driving almost endemic to owners letting their dogs roam uncontrolled; through to people in the highest office failing to abide by a decency that should be incumbent upon them to do so. There is an entitled attitude that pervades the culture here from requiring recruitment hoops for jobs placements to borderline discriminative practice against all who are non-Caymanian, the islands need to recognise this is a global place with a requirement to accept others equally.
The culture also promotes a sort of deficiency in the ability to challenge. From accepting poor work standards for things as simple as time-keeping and attendance to actual work ethic and ability.
This lack of ability to challenge permeates through to more serious criminal matters including financial crime. I read repeatedly the messages put out by Cayman Finance trying to ‘cleanse’ the islands reputation while all the while there are virtually no fines, punishments, convictions or even credible investigations into financial crime or tax evasion.
What will happen now is an attack on this post by local zealots who can’t see the wood for the trees.
FATF isn’t attacking Cayman. The world is moving constantly and political changes are going to put these islands under immense pressure. FATF is a useless organisation that is politically led. If it was any good $2 trillion wouldn’t be laundered every year with less than 1% of that recovered. All of that money represents people suffing loss. From drug dealers to the sex trade there is a victim at the end of every stolen dollar. So instead of moaning that FATF are picking on Cayman, the people should recognise the inter-connected world we live in and how political forces are shifting.
Brexit neans the islands are not as ‘protected’ as they were.
The pandemic will cause more rigorous management of global tax so developed nations will claw back money transacted here. The CFATF, FATF and EU moves are all linked to these things.
Cayman needs to shape up, get with the agenda or times are going to get tougher.
The regulators need a bloody good kick up the arse and expert investigators in volume need drafting in to clear up the mess of the AML structure here. Not enough skilled people and not enough investment.
Interesting Tara resigns so the others can point at her now unabated.
Very well put!
For example: in tackling CFATF’s serious 2018 point of money laundering, theft and entrenched political corruption, we quickly passed the “Standards in Public Life Law”, where most Cabinet and Board disclosures haven’t been updated since 2019 or at all. No charges, no arrests…nothing. Many other “gatekeeper” committees aren’t even properly constituted at this time. The Attorney General is part of this.
Good thing Tara said her goodbyes yesterday. Alden, follow suite!
This is a disgrace on the part of CIMA who are the one agency which has had this type of regulatory oversight as a part of their remit since the day of conception.
Anyone who has been involved in this process of trying to get Cayman off any list have known from the beginning that the lack of fines and convictions was a massive failure and red flag. But all the overpaid big wigs at CIMA- particularly the useless MD (supported by the bloated and sanctimonious Board) did was act all superior and do nothing.
The Ministry of Financial services has benefited enormously during this time also, playing their cards to obtain massive increases in personnel. Yet Chief Officer Basdeo -and the Minister- have joined forces with CIMA in denying their was a problem. Look where that has now got us.
They should all be ashamed of themselves . They have let the country down and lead to this listing whilst other entities in government have gone nice and beyond to do what was required in their respective areas. People need to be held accountable and action taken.
CIMA is a joke – look at how they handled the whole Onetradex meltdown
‘‘In a press release, government officials said it was found to have met 60 out of 63 recommended actions but it was required to work with FATF now to swiftly address the outstanding deficiencies, which has provided an action plan for the Cayman Islands.’’
After these 63 recommendations are satisfied, they will come back with 70 more! In or around 2001, Cayman was required to satisfy some 30+ recommendations if I remember correctly. Tell them to go to hell.
AML risks are always changing as the crooks get smarter and change their tactics. You can’t just say that compliance is fully met because the 30+ recommendations from 2001 were implemented. Sounds like you live in a very simple world.
You gotta play by the rules buddy! Cayman has a deserved reputation brought about by local and global white-collar criminals.
from over 3 decades ago…
Don’t be an idiot. It’s this kind of attitude that got you here. You’ve got to play by the rules or it will cause these islands problems
@6:59 and I suppose you believe the G7 countries are all “playing by the rules”. Don’t be a naive moron!
The USA has banned anonymous shell companies. No more secret ownership so that Delaware BS excuse cayman often uses is no longer valid.
U.S. Congress bans anonymous shell companies
https://www.reuters.com/article/idUSKBN28L2NV
The difference is Cayman is a dot in the ocean while the G7 are huge nations with significant clout. There’s a reason they are the G7 so I guess you are the moron. Recognise your size because at the stroke of a pen these islands can be finished and there isn’t a thing you could do. You can’t compare yourselves to the G7 ffs!
The DPP and financial crime unit failing once again. Why not prosecute the big offenders instead of poor Lucy who stole $5 from the till and then call it money laundering when she spends it! And let’s not talk about the Gold Case….what a debacle!
Bottom line.. poor Lucy doesn’t have the money to defend herself so the judicial system throws the book at her. The big boys buy the best lawyers and contribute to political campaigns.
Agreed. so that is corruption that is not being dealt with by the authorities.
Sorry Alden, 2 black listings on the financial services, the sole pillar of Cayman’s economy during your tenure. Time to resign.
So is grey now the same as black? WTF
It depends on the level of one’s racism.
LMAO the FATF blacklist is north korean & Iran.