International regulators demand legislative changes from Cayman

As the Caribbean Financial Action Task Force continues to review Cayman’s defenses against terrorist financing and money laundering, officials from that organization have required government to make legislative changes to come in line with international standards.

Attorney General Samuel Bulgin brought these changes to the Legislative Assembly on Wednesday, and legislators voted in favor of a second reading of The Proceeds of Crime (Amendment) Bill 2018.

Mr. Bulgin said the bill would give more independence and autonomy to the Financial Reporting Authority, the organization that provides information to law enforcement agencies from other jurisdictions who have investigations that involve Cayman.

The attorney general explained that the amendments will remove the requirement for the Financial Reporting Authority to obtain permission from the Anti-Money Laundering Steering Group before entering into agreements with other financial investigative units. The amendments will also remove requirements for the authority to get consent from the attorney general before fulfilling international information requests.

Mr. Bulgin said these amendments are required by the Caribbean Financial Action Task Force.

“We’re going through a period of review and have a third draft report of our system, and this was one of the things that was flagged in that report,” he said.

Even though the CFATF is reviewing Cayman based on the task force’s 2012 standard, the standards can be changed in the middle of the review, Mr. Bulgin said.

“It’s a crazy process, but we’re required to comply,” he said.

Before legislators voted on the second reading, East End MLA Arden McLean spoke out against the CFATF.

He said the Proceeds of Crime Law has been amended at least five times since it was passed about 10 years ago, and that international regulators keep moving the goalposts for Cayman.

“When will they stop?” he asked. “Maybe never.”

Mr. Bulgin agreed with Mr. McLean that the standards for Cayman keep shifting, and he said that the territory is becoming “review-fatigued.”

“[Mr. McLean] is correct: this is an ongoing process. And each time we think we’re there, the standards change, and we’re required to amend our laws to be in compliance,” he said. “As I stand here, we’re being reviewed. The FATF has a way of changing its standards, and we’re required to comply if it’s rolled out tomorrow morning. That’s how this works.”

Mr. Bulgin added that he’s going to Barbados next week to discuss the review with CFATF officials.

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