The Financial Reporting Authority is looking for additional staff to handle a skyrocketing load of suspicious activity reports of potential money laundering and other financial crimes connected to Cayman.
Financial Reporting Authority Director Robert Berry told the Public Accounts Committee on Thursday that his department received 938 suspicious activity reports last year – about a 50-percent increase over the 601 reports it received in 2016/17, which itself was a near record.
When the Financial Reporting Authority receives a suspicious activity report, it must look into the report to see if it should be forwarded to law enforcement authorities for further investigation. Most of the reports involve “suspicious activity” – typically reports on accounts showing activity that is out of line with the account holder’s expected level of income – while other reports suspected fraud, tax evasion, corruption and money laundering.
The Financial Reporting Authority is dealing with a growing backlog of uncompleted reports.
Due to unfinished reports from previous years, the authority had 980 SARs to analyze in 2016/17. The agency completed 398 reports in total, carrying the remainder into the next fiscal period.
Mr. Berry did not say how large the backlog at his authority currently is. That information will be included in the authority’s annual report, which will likely be released later this year.
The authority has said 2016/17 was “particularly challenging” due to the resignation of one of its most experienced staff members, Senior Financial Analyst Julian Hurlston.
The Financial Reporting Authority attributed the increased number of SARs to more stringent regulations and reporting rules that have come into effect in recent years. For example, all funds must now have anti-money laundering officers.
Mr. Berry told the Public Accounts Committee that he needs additional resources to deal with the growing backlog.
“We’ve recently undertaken assessment of our resource needs, including both human and physical capital – IT infrastructure – and concluded we don’t have the necessary resources to meet mandate in terms of timeliness,” he said. “We’ve prepared a paper for the chief officer and AG to seek supplemental funding this year for additional staff.”
Anti-Corruption Commission Chairman Richard Coles also appeared at Thursday’s PAC sitting, and he, too, said additional staff would help his commission function better.
Mr. Coles did not express the same urgency for additional resources as Mr. Berry, but he said ideally he’d have twice as many investigators on his force.
The Anti-Corruption Commission often needs the assistance of the Royal Cayman Islands Police Service to make arrests, Mr. Coles said. He also said his commission does not have a female investigator, and therefore has to use an RCIPS female officer when dealing with a female suspect.