UPDATE ON THE CAYMAN ISLANDS ANTI-MONEY LAUNDERING REGULATIONS

UPDATE ON THE CAYMAN ISLANDS ANTI-MONEY LAUNDERING REGULATIONS

Dublin, 22nd October 2018

Extension of Filing Deadline

The Cayman Islands Monetary Authority (CIMA) recently extended some of the deadlines regarding the requirement for investment entities to appoint an Anti-Money Laundering Compliance Officer (“AMLCO”), Money Laundering Reporting Officer (“MLRO”) and Deputy MLRO (“DMLRO”) (collectively the “AML Officers”).

All Investment Entities (which includes CIMA regulated funds and unregulated investment entities) were originally required to appoint their AML Officers by 30 September 2018.

Additionally, CIMA regulated funds that were registered before 01 June 2018 were required to file details of those AML Officers with CIMA via the REEFS online portal, by 30 September 2018.

Funds registering with CIMA after 01 June 2018 are required to appoint their AML Officers and file details of same as part of the initial CIMA registration process.

The revised deadlines are as follows:

  • CIMA Regulated Funds, registered with CIMA before 01 June 2018: Whilst the requirement to appoint the AML officers by 30 September 2018 did not change, these funds now have until 31 December 2018 to file the officer details with CIMA via the REEFS online portal.
  • Unregulated Investment Entities:  These entities now have until 31 December 2018 to appoint their AML officers and currently have no obligation to notify CIMA.

The Cayman Islands’ Anti Money Laundering Regulations 2017 came into effect on 02 October 2017 and were revised in February 2018 by the Anti Money Laundering Regulations (2018 Revision) (“the AML Regulations”).

The new regulations introduced a number of new requirements for Cayman financial service providers, which includes Cayman investment funds.  The primary aim of the new regulations was to bring Cayman in line with international best practices for prevention of money laundering. One of the most notable changes was the requirement for Cayman funds and investment entities to appoint AML officers.  For further details on this requirement, please see our earlier circular Important Changes to Cayman Islands’ Anti-Money Laundering Regime.

The cost of compliance with the Cayman AML Regulations has undoubtedly risen. However, these necessary changes strengthen Cayman’s regulatory framework, enabling the country to align itself with best practices in other jurisdictions,” says Des Johnson CEO of Centaur Fund Services U.S. “Centaur is well established in Cayman and is offering AML Officer Services to its clients ensuring that they can comply with these new regulatory requirements.

CENTAUR’S AML OFFICER SERVICES
Centaur provides experienced professionals to perform the roles of AMLCO, MLRO and DMLRO for funds. These officers are accountable to the board/governing body of the fund in respect of the following duties:

  1. Ensuring the fund has adequate procedures in place to comply with all aspects of the AML Regulations.
  2. Regularly requesting and reviewing information from the fund administrator and/or the investment manager to assess the money laundering and terrorist financing risks to which the fund may be exposed.
  3. Regularly requesting and reviewing information from the fund administrator and the investment manager to monitor anti-money laundering and anti-terrorist financing compliance.
  4. Receiving and investigating suspicious activity reports (SARs) and where deemed necessary, reporting such to the Cayman Financial Reporting Authority.
  5. Reporting to the board/governing body on the fund at its scheduled meetings on the fund’s compliance with the AML Regulations.
  6. Conducting an annual review of the fund administrator’s and/or investment manager’s anti-money laundering and anti-terrorist financing policies procedures, systems and controls.
  7. Performing periodic testing to verify the fund’s compliance with the AML Regulations.

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