Emerging from the grey – the Cayman Islands’ relief and resolve in achieving global financial compliance

      The FATF held a plenary meeting in Paris on 25-27 October 2023 after which it announced the decision to delist the Cayman Islands from its list of jurisdictions subject to increased monitoring (the “grey list”).

      The Cayman Islands was first placed on the grey list in February 2021 following the FATF’s 4th-round mutual evaluation process. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes, and it is subject to increased monitoring.

      How the Cayman Islands emerged from the grey list

      The Cayman Islands made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime and continue to work on implementing its action plan to address its strategic deficiencies, including by:

      1. applying sanctions that are effective, proportionate and dissuasive, and taking administrative penalties and enforcement actions against obliged entities to ensure that breaches are remediated effectively and in a timely manner
      2. imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up to date beneficial ownership information
      3. demonstrating that they are prosecuting all types of money laundering in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.

      What events led up to the Cayman Islands’ removal from the grey list?

      The Cayman Islands’ removal from the grey list comes after a successful on-site visit by the FATF in early September, and the Cayman Islands government will continue to strengthen its AML regime to ensure the jurisdiction meets evolving global challenges and standards.

      The FATF plenary congratulated the Cayman Islands for its significant progress in addressing the strategic deficiencies identified during the 4th-round mutual evaluation process. The FATF will commence its 5th round mutual evaluation process in 2025, with the evaluation of the Cayman Islands expected to begin in 2026. In the meanwhile, it is anticipated that the jurisdiction will be removed from the EU’s AML blacklist.

      Further information

      Read the Cayman Islands Ministry of Financial Services press release here.

      Read FATF press release here.

      If you would like to discuss further or have any questions, please reach out to your usual Waystone representative, or contact us below.

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