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Local News 17 May, 2021 Follow News


The Cayman Islands Monetary Authority (CIMA) has rejected assertions by the Maples Group which has filed for a judicial review into how the agency is enforcing anti-money laundering regulations.

In a press statement, CIMA says it has “noted with disappointment and extreme concern the fact that the Maples Group has thought it fit to issue the recent press release regarding their judicial review of the Authority’s interpretation and application of certain provisions within the Anti-Money Laundering Regulations (AMLRs)."

“Such action was not only inappropriate, professionally irresponsible and crafty, but also entirely against the spirit of existing Court Orders that currently pertain to these proceedings,” CIMA says.

According to the Maples Group, the regulatory and oversight agency has changed its approach to the application of certain provisions of the anti-money laundering regulations (AMLRs) without providing prior notice, consulting with industry stakeholders or issuing updated guidance notes.

CIMA says it wishes to make it abundantly clear that it intends to robustly defend these proceedings, and will strenuously resist any incursions into, or attempts to undermine, the strength of the jurisdiction’s AML/CFT regime.

Stating that it takes its supervisory responsibilities extremely seriously, CIMA adds that it “will take all necessary actions whenever regulated entities repeatedly fail to address supervisory directions to comply with the jurisdiction’s regulatory requirements.”

The pushback from CIMA comes in a week when it has been engaged in another high-profile issue in its role of overseeing the jurisdiction's important financial services sector to ensure local and global industry compliance.

The regulatory agency for the Cayman Islands financial sector goes on to say that “as far as AML/CFT issues are concerned, these are not normal times, and persons conducting relevant financial business in or from these islands should be aware that it is not business as usual.”

Financial services providers should also be aware that, given the increased scrutiny which the Cayman Islands faces due to our ongoing international obligations, all attempts to undermine the jurisdiction’s ability to implement the AMLRs will be vehemently resisted, the agency stresses.

“This is not only necessary in the broader context of our role as an international financial services center, but vital to ensuring that the jurisdiction and its regulated entities take the required and necessary measures to prevent the misuse of legal persons and arrangements for money laundering, terrorist financing and other financial crime.”

CIMA says this is fundamental to upholding the integrity of our financial system, and the Authority will maintain continuous vigilance in that regard.

This strong public position taken by CIMA in its press release contrasts with the rather low-key publicity it gave to a recent decision that is historical by comparison.

Just this past week it was uncovered that CIMA has slapped a record CI$4.2 million fine on the law firm Intertrust.

On that matter, CIMA said, “The administrative fines were imposed for the company's pervasive and protracted history of non-compliance with the requirements of the anti-money laundering regulations and its failure to remediate these significant breaches.”

In listing a series of violations by Intertrust, the agency said these were uncovered during on-site inspections and that similar failings were also discovered during previous inspections.

Intertrust has said it will appeal the ruling arguing that the findings were historical and it was already working with the CIMA to address the areas of concern.

CIMA says this case highlights the importance of companies having in place effective policies and procedures to ensure compliance with the jurisdictions international obligations.

The agency says it is committed to enhancing the Cayman Islands regime against money laundering, financing of terrorism and will continue to exercise vigilance and “will take the appropriate and other actions where necessary”.

However, with the ruling against Intertrust only posted on CIMA’s website, some industry experts have questioned why a fine of this magnitude by the agency which has oversight for the jurisdiction’s lucrative financial sector was not given further publicity.

To date, there has not been any comment from either the Government or the Opposition, especially given the scale of the fine and the issues surrounding it.

Cayman has been under increasing pressure over how it regulates the financial services industry here and is currently on an EU ‘grey list’ for what global regulators claim are compliance shortcomings.

The jurisdiction was blacklisted in 2020 along with what the EU along called 'non-cooperative jurisdictions in tax matters. However, following several legislative updates and direct lobbying, Cayman was removed from the blacklist but placed on the grey list.

Cayman's important financial services sector has been keeping the economy afloat during the pandemic.

The persistent global scrutiny was a top issue during the recent election campaign with candidates generally expressing the view that the pressure on Cayman was unfair.

There was agreement that the jurisdiction also needed to be more proactive in defending its processes and tackling what were seen as misperceptions about the industry here.

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