FATF still concerned by Cayman’s failings on action plan

| 27/02/2023 | 80 Comments
money laundering, Cayman News Service

(CNS): The Financial Action Task Force has expressed concerns that the Cayman Islands is still failing to complete its action plan to address the “remaining strategic deficiencies” by demonstrating that all types of money laundering cases are being prosecuted in line with the jurisdiction’s risk profile. Officials here were hoping that the FATF would have announced its intention to remove this jurisdiction from its grey list this month. However, while Cambodia and Morocco have been de-listed, Cayman remains under scrutiny.

Financial Services Minister André Ebanks and other government senior officials participated in the most recent plenary, which was held in Paris and concluded Friday. The FATF has strongly urged the Cayman Islands to “swiftly demonstrate significant progress in completing its action plan by June 2023 or the FATF will consider next steps if there is insufficient progress”.

Of the original 63 recommendations made, Cayman has addressed 62. The task force has also noted the country’s high-level political commitment to work with the FATF and the Caribbean Financial Action Task Force (CFATF) to strengthen the effectiveness of its Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT) regime and the steps towards improving it. But it is still not enough.

“The Cayman Islands should continue to work on implementing its action plan to address its remaining strategic deficiencies by demonstrating that they are prosecuting all types of money laundering cases in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions,” the FATF said in the notes about the session.

In a release from his ministry about the current situation, Ebanks explained the issue at the heart of the problem of getting Cayman off the grey list.

“For FATF to consider this recommended action as addressed, the Cayman Islands must demonstrate, among other things, that those convicted have been sentenced,” he said, adding that in accordance with FATF procedures, the Cayman Islands will provide an update during the FATF Joint Group’s review meeting this April, prior to the FATF Plenary this June.

According to some local industry experts, the refusal to remove the Cayman Islands from the grey list continues to relate to global politics of the countries driving the agenda at FATF, a sentiment that the minister has also noted on previous occasions.

“The reality is that Cayman is in good shape and progressing and should get off the ‘grey list’ in June during the next sitting,” one financial sector stakeholder told CNS. “More has been achieved in the last 12-18 months by this minister to address the issues and make real progress than anything done by previous ministers for financial services.”

Others, however, have also told CNS that there are problems in relation to prosecutions because the RCIPS and the Ani-Corruption Commission are short of the experts needed to conduct complex financial crime investigations. Criticisms have also been levelled over a tendency for law enforcement officials here to go after the “lower hanging fruit” rather than delving into more complex potential crimes.


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Category: Business, Financial Services

Comments (80)

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  1. Anonymous says:

    It’s somewhat disingenuous to suggest that Cayman is in ‘good shape and progressing’ when the likes of Cambodia and Morocco managed to get delisted ahead of Cayman.
    The fact of the matter is specialist investigative units like the Anti Corruption team are not fit for purpose. ‘ Theft of topsoil and the ten year investigation into theft of footballs simply doth not butter parsnips.
    The lack of relevant expertise within the unit, if true, should bring into question the suitability of management within that unit to achieve the prerequisites required to get Cayman delisted and live up to the world class status frequently broadcasted from the GAB. Time for a change!

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  2. J says:

    The story just before this one is “DPP fails to prosecute” what is clearly a miscarriage of procedure / justice and involves many very highly connected persons across several CIG entities. Several Magistrates have said as much! And the ODPP = crickets!

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    • Anonymous says:

      don’t worry The new highly experienced and accomplished CIMA board will solve all of our problems.

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  3. Anonymous says:

    Grand Cayman hosts over 200 registered “churches”, whose only outward public contributions are hysteria and medieval policy decisions. What are they really doing, and for whom? ACC/FCU need to have a close look at those “construction” loan books, repayments, unusual buy/sell transactions, and non NPO-category disbursements. Laundering via churches is a CARICOM classic, and we have more churches per capita than almost anywhere on Earth.

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  4. Anonymous says:

    CILPA and CARA sitting on the sidelines because of an absence of legal basis to do anything. Sitting ducks. 🦆 🦆 goose

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  5. Anonymous says:

    We need a Sam Bankman-Fried 🤪🤪🤪

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    • Anonymous says:

      Where have you been? Our SEZ has hosted a steady flow of crypto and ICO shams, including by convicted and banned criminals. No local arrests or charges for any of those that presided and signed-off on KYC failures in Cayman! Tara’s sandbox is open for business.

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      • Anonymous says:

        CEC/SEZC is hands off, just look at who is behind it.

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        • Anonymous says:

          The guy behind it is an ethical person. Don’t make unsubstantiated innuendo.

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          • Anonymous says:

            He is but it’s true that there are plenty of sketchy operations in there. It is substantiated, you can Google it.

            Enterprise city should be the first thing to go once these guys figure out that they need some population control. It’s too easy to get set up in there and for political reasons they are excepted from the usual processes put in place to protect Caymanian employment (yes I know those don’t work too well but it’s better than nothing).

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          • Anonymous says:

            The issue is not the ethics of the people/family behind CEC. The initial concept made sense of bringing in businesses that would not otherwise be in Cayman. This was a pure real estate play. The issue is that the initial concept failed and now CEC is recruiting firms to come to Cayman that compete directly with fully regulated financial firms. Where is CIMA/ROC in looking at these firms?

  6. Anonymous says:

    Stop kissing FATF ass then send their nationals back home pronto see how quick they figure it out. They tried this with Panama till they figured can’t get through with their investments and Canal business soon understand their blackmail and extortion strategy is a two way street and stop their ridiculous foolishness.

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  7. Anonymous says:

    Let me give you an example of why Cayman fails.
    Once upon a time only a few months ago a number of persons stood trial for money laundering and other offences in the Grand Court.
    The RCIPS had video evidence, telephone evidence and text pictures all showing ML. The defendants didn’t even give evidence.
    The jury acquitted in less than two hours.
    Hmm I will let you come to your own conclusions as to CI corruption and a weak judiciary and jury.
    FATF are actually right about this jurisdiction.

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  8. Anonymous says:

    The powers at FATF do not want Cayman to be a financial center, period, and Cayman will never be able to effectively prosecute high end international financial crimes. You need to get London to help out if you hope to have any chance at getting off the gray list.

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    • Anonymous says:

      That’s not true. The FATF are asking us to demonstrate comprehension of their years of messaging on acceptable standards of diligence and rigour. There are no shortages of Cayman hosted shams and headline laundering events. What’s missing are political Will and competent oversight to recognise PCAMLCTF crimes domestically, intercede before the headline, make local arrests, and begin prosecuting our own people for this misconduct without the FBI/DEA/DOJ or other international agency having to get involved. Foreign agencies shouldn’t have to force a plane to land and raid it with their guys in blue windbreakers. Even after our local crooks are prosecuted and convicted in the USA, they seem ot be welcomed back home to Cayman with “tough break” sympathies, and without having to face any new local charges – in many cases entirely unsanctioned and ready to set up for the next hustle. That’s wrong.

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  9. Anonymous says:

    Nicaragua and Pakistan are no longer subject to increased monitoring by the FATF.

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  10. Anonymous says:

    cayman… a place with hospital sized laundry facilities.

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  11. Anonymous says:

    What do Jon Jon Seymour and David Wight think the solutions are to solve this FATF problem?

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    • Anonymous says:

      Elect better candidates to solve problems that this bunch cannot handle. PACT Government is Cayman just as bad as PPM failed us. Need new blood.

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      • Anonymous says:

        No government gave away more of Cayman and sold out Caymanians than the PPM led Unity government with Alden McLaughlin and McKeeva Bush as co-leaders. PPM had eight years in charge yet worked tirelessly for developers just look at the results. How many hundreds of millions in concessions did they give away? One thing is for certain PPM can never be trusted to lead this country again. They need to be investigated by the Auditor General’s office and ACC.

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        • Caymanian says:

          Not sure where you see PACT any better honestly. You just have your. ooh let me hush.

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          • Anonymous says:

            Pact are too disorganized more like a gong show for the scams and giveaways so far. They are not united and all about the flashy shallow headlines. Too stupid to succeed and first chance they get somebody will be charged for corruption.

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        • Anonymous says:

          Dats de way it goes.

    • Anonymous says:

      Don’t forget Barbara, Joey, Heather, Jay and Kenny

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  12. Anonymous says:

    Law firm trust accounts with banks.

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  13. Corruption is endemic says:

    It is very unusual for senior mgmt leaders to remain in control of regulators for multiple decades.

    Maybe we need some new blood at CIMA.

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    • RES IPSA LOQUITUR says:

      From a FATAF standpoint CIMA does not appear to be the root problem or this issue. It is well know. That CIMA has levied record breaking fines and sanctioned industry rule breakers which has upset the status quo and those deemed to be the power brokers of industry.

      Check DPP’s office, Tax Information Authority and The Anti-Corruption Commission about their significant issues and general failings. Outside of the Canover Watson trials what has the ACC accomplished?

      For the Cayman Islands to continue to ignore the Special Economic Zone it’s loopholes and the types of entities that set up there with little to no regulatory oversight plus the negative headlines and charges brought against entities and individuals registered in the SEZ will always bring negative comments and legitimate concerns.

      Has Cayman ever recorded any money laundering convictions with any related real estate deals or projects? Ask yourself why not?

      Restaurants are prime vehicles for money laundering, trading in gold, jewelry and precious metals is also common place. How many convictions in Cayman involving any of those matters?

      What ever happened to the case of the Colombians that smuggled in gold bullion in their private jet? Are we to believe that it was a one off event?

      There are many issues worthy of investigations in these islands the question is why isn’t it happening?

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      • Anonymous says:

        Plenty of Restaurants on SMB that operate at a loss with half a dozen owner / investors paying themselves rent etc and yet never seem to struggle or go under.

        I wonder how cooked those books are.

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      • Anonymous says:

        Charges for stolen top soil.

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      • Anonymous says:

        Anyone with a working brain knows that MONEY talks and bull poop walks in the Cayman Islands!!!

  14. Anonymous says:

    Questions…

    1. Who finances the operations of the FATA?
    2. Having a close look at the answer to the first question are there any potential conflicts of interest?

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  15. Anonymous says:

    “…that those convicted have been sentenced”. More like the number and type of prosecutions, given the underlying size of the financial sector, and the identity of those being prosecuted. Hitting a few street gamblers for money laundering their proceeds, and the odd token poster boy like Canover or a bent Customs officer isn’t going to cut it.

    Go on – list all the prosecutions that have actually been initiated and demonstrate that FATF are being unreasonable and you have prosecuted international laundering of proceeds of crime and corruption, that you have prosecuted those committing frauds using Cayman vehicles, that you have prosecuted people beyond the rank and file of government departments for corruption? Crickets.

    You are not going to satisfy them unless you actually do it, and you can can bleat all you like about how the grey listing is unfair and politically motivated, but in the absence of any action no one is going to care. You fight the perception of deliberate inaction by demonstrating action – but then again, I guess you would rather offend FATF and endanger our financial services sector then actually step on the toes you would have to demonstrate decisively that we are a clean jurisdiction.

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  16. Anonymous says:

    How truthful is CIG and the AG with FATF?

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    • Anonymous says:

      10.03 A more pertinent question is..How truthful are the FATF with regards to their actions towards Cayman?. It seems to me that they want Cayman to publish a big list of prosecutìons which they hope will scare off potential customers and eventually cripple Cayman. They appear to be interested in quantity rather than quality of prosecutions.

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  17. Anonymous says:

    Perhaps if our Government were to pay more attention to the restaurants and food trucks with no clients but big bank, overnight rental car companies, and “shell” real estate transactions – all to conceal money laundering, it might help with FATF demands!

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    • Diogenes says:

      Sure – FATF are really worried about low level laundering involving food truck proceeds and a few multi million condo sales. Perhaps if we were to prosecute a single one of the frauds involving tens of millions or even hundreds of millions perpetrated using Cayman hedge funds and financial vehicles, and go after their guiding minds personal assets, rather than assume that the onshore law enforcement should do it, it might help with FATF perception that we have rules, but don’t enforce them.

      “We do these things not because they are easy, but because they are hard”. JFK

      “We don’t do these things because they are hard, or we might upset certain vested interests” – Cayman Government

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    • Anonymous says:

      Need check those Canadian bartenders that now “own” about 10 bars and restaurants and have million dollar homes. Yes we all know who they are.
      Big takings for such slow nights, go figure!
      Step up and clamp down.

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    • Anonymous says:

      LOL. Sure the international community really wants Cayman to crack down on food trucks. HAHAHAH

  18. Anonymous says:

    Whatever Cayman does in an effort to comply, I don’t believe that it will ever be enough. I don’t think they ever intend to remove us from the list, and I believe they will keep “moving the goalposts” in an effort to wear us down and destroy our financial industry.

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  19. Anonymous says:

    We had better do what our European former slave masters tell us to do. Otherwise they will put us all back in chains…

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    • Anonymous says:

      Our former European slave masters – you do know the FATF is a multinational organisation composed of many countries, most of which didn’t even have slave interests in Cayman? You want to find someone who directly benefitted from slave owning n Cayman, you can start right here with our multigenerational land owning descendants.

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    • Anonymous says:

      9:25 – Please do us all a favor and go see a doctor. You truly need help. Best of luck to you.

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      • MLRO says:

        They do bring up a good point though…..
        It is very curious how empty restaurants stay open….close…change names reopen then over again all with the same owner(s) foreign investors through a now caymanian status holder.

        This is just the chump change compared to what the FSPs are circumventing.

  20. Anonymous says:

    cayman is a place based around tax evasion and money laundering.
    if you can’t face facts then we can’t move on.

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    • Anonymous says:

      Idiot. No bank secrecy, KYC/AML well beyond any onshore jurisdiction. You’re 40 years out of date.

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    • MLRO says:

      It’s tax efficiency and we only pave the roads that onshore regulations cleared.

      It’s fantastic and it’s done because those with the money onshore want it done not us.

  21. Anonymous says:

    I’m not in the finance or legal industry, so welcome being corrected but it occurs to me that even if CIMA/RCIPS/ACC did have the expertise and will to go after actual financial crimes rather than admin failures that ‘we’ would rarely if ever get first dibs in prosecution over the likes of the SEC/US Treasury/FBI. It’s not like we’re ever going to divert a plane to Canada to GCM and arrest someone off it! Does Cayman ever get any credit by the likes of FATF for assisting in those prosecuted abroad, assuming we do? Maybe we need to tag on to onshore prosecutions to get credit, if that is even possible?

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    • Anonymous says:

      You are absolutely right at one level. Yes, if we tried to deport someone from overseas to stand trial here if they were facing charges in their own country, it would probably fail. Or if we tried to go for asset confiscation against overseas based assets. But you know what – if we actually tried, it might show we cared. If we don’t try, it looks like we don’t. And that’s putting the best face on it. I have been involved in the financial service industry here for over a decade, have seen multiple cases involving fraud using Cayman entities, and not one – not one – case in which Cayman even tried to bring charges. And in most of those cases, the onshore authorities didn’t either. The onshore guys say the crime was committed in Cayman, the Cayman authorities say its the overseas authorities responsibility because its their national that committed the crime. And we wonder why the popular perception created by The Firm persists. Because we do nothing – NOTHING – to demonstrate that we take this stuff seriously, other than pass increasingly complex KYC regulations and have CIMA fine people for paperwork compliance, none of which s internationally visible, whilst completely ignoring the underlying criminality, which is.

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      • Anonymous says:

        The Firm II would have a global focus centered around Caymanian law and financial transactions and corporate structures.

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      • Sini says:

        I agree with this completely. What we have now is KYC regulations that are so complex and overbearing that it’s counter productive. So much time is used to ensure passport copies are uptodate and certification language is correct to the letter, this does not help with the actual issue, which is lack of criminal procecutions for actual criminal activity with intent to launder money . Very recently there was bank in Cayman ownership with serious concerns of actual money laundering (serious enough for their US counterpart to stop processing their dollar transactions). CIMA did nothing. Financial Crime Unit did nothing. Not even investigation.

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        • Anonymous says:

          Cabinet status grants? Could the Chief Justice and Attorney General please comment on the inaction in relation to those?

  22. Anonymous says:

    The Government has had 3 years to address this deficiency and we are still on this grey list. The FATF has set out clearly what needs to be done and our joke of a police force and DPP cant get their act together for long enough to investigate and bring a single case to justice and get a conviction. Sad state of affairs. Where is the Governor as he is responsible for the police.

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    • Anonymous says:

      If the Governor cant get the police to breathlyse a MP what chance do you think there is that they will investigate financial crime and corruption?

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      • Anonymous says:

        Don’t forget trainergate. Oh, and then there is the small issue of certain cabinet status grants…

  23. Anonymous says:

    “Others, however, have also told CNS that there are problems in relation to prosecutions because the RCIPS and the Ani-Corruption Commission are short of the experts needed to conduct complex financial crime investigations. Criticisms have also been levelled over a tendency for law enforcement officials here to go after the “lower hanging fruit” rather than delving into more complex potential crimes.”

    Plunderland

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    • Anonymous says:

      What could be more Caymanian that being paid to serve in a post in which you are entirely out-of-depth and unqualified. It’s a classic.

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  24. Anonymous says:

    The truth is, Cayman has done next to nothing to address political corruption, drug transshipment, human trafficking and related laundering. No arrests and no prosecutions since these failings were pointed out. The Financial Services sector spends hundreds of unbillable hours a year on necessary client compliance, only to look over the fence at CIG confirming criminals to high office, and DPP ignoring serious case files that are in the public interest to refer for prosecution. The effort and conviction is truly is two worlds apart.

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    • Anonymous says:

      You said a mouthful but unfortunately the majority of it is unrelated to FATF requirements. What the FATF should say is ” Our desire is to see Cayman’s economy destroyed and won’t stop until it is”.

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      • Anonymous says:

        You’re an idiot if you think political corruption has nothing to do with it. Fixing that would in turn fix a host of other problems.

  25. Anonymous says:

    How about all the white collar SEZ and SIBL criminals that have been arrested, indicted, and convicted in DoJ/SEC raids/forced plane landings etc…didn’t these crooks obscure beneficial ownership, and disperse money, breaking AML laws in the Cayman Islands for years while lining their pockets? Where are those charges? Do we have some kind of double jeopardy arrangement with the US Government?

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