Compliance
Cayman Islands' Government Hails List Removal By European Union, FATF

The presence on such lists has been a shadow over the affected jurisdictions, so their removal is a cause for celebration. The Cayman Islands aims to benefit from its status.
The Ministry of Financial Services and Commerce of the Cayman
Islands has toasted its recent removal from the European Union’s
and FATF’s “grey list” of jurisdictions with deficiencies in
their anti-money laundering and counter-terrorist finance
controls.
The removal from these lists was the result of “significant work”
carried out to ensure that the jurisdiction’s AML/CFT framework
complies with international standards.
The FATF, aka Financial Action Task Force, took the Cayman
Islands from its list of jurisdictions under “increased
monitoring” last October. The EU, meanwhile, took the Cayman
Islands from its list, effective 7 February.
Bodies such as the FATF – an inter-governmental body – and the EU
have campaigned to tighten controls on illicit finance and weed
out offshore tax evasion in recent years. Governments,
particularly as public debt has risen, have sought to squeeze
what they consider unacceptable use by such offshore centres for
those seeking to minimise tax. The imposition of sanctions on
Russia in 2022 after the Ukraine invasion has also given an added
edge to the campaign against money laundering.
The reputational costs of being on such lists – notwithstanding
queries about whether “onshore” jurisdictions can also have poor
practices – can be significant. Hence the Cayman Islands'
delight at recent events.
A positive move
“Our removal from both lists, as well as the UK’s list, of
high-risk third countries for AML purposes, speaks to the Cayman
Islands’ enduring commitment to being a global partner in
combatting money laundering and other forms of illicit finance,”
the Ministry of Financial Services and Commerce of the Cayman
Islands, said in a statement emailed to this publication.
“The jurisdiction worked diligently and cooperatively to complete
63 recommendations based on the FATF’s global standard, including
implementing the global standard for beneficial ownership; and by
introducing monitoring and fines for non-compliance,” it
continued.
“Removal from the EU’s list means that EU financial institutions
are not required to take enhanced due diligence measures in
relation to persons/entities from the Cayman Islands,” the
government said. “Removal thus improves Cayman’s
competitiveness and reduces the cost of doing business both for
EU institutions and Cayman wealth management and the financial
services sector.”
The government said the lists’ purpose is similar to providing an
easily understood “grade” that draws attention to jurisdictional
compliance for AML standards.
“The Cayman Islands’ assessment experience with the FATF was
that, while it undoubtedly was rigorous, it resulted in much
improved understanding of ML/TF risk and the appropriate
calibration and enhancement of measures to address those risks,”
the government added.