A new task force has been established to proactively investigate money laundering and terror financing in the Cayman Islands.
The new police unit, bolstered by experts from the City of London police force’s Economic Crime Directorate, will work with financial regulators to put suspicious transactions under the microscope.
Royal Cayman Islands Police Commissioner Derek Byrne said the task force would have ring-fenced resources and its own budget to initiate inquiries into the movement of money through the islands.
International authorities fear criminal gangs could be stashing their ill-gotten gains offshore or using accounts in the Cayman Islands to siphon funding to terrorist organisations. Byrne said there was no direct evidence that this type of crime was taking place in the territory.
But he acknowledged that the recent Caribbean Financial Action Task Force report had correctly identified a shortfall in resources dedicated to such investigations.
“The big finding was not that we have a major problem with money laundering or terrorist financing,” he said.
“The issue was that we were not looking for them. This is a major financial hub and we weren’t going out proactively looking at.”
The report warned that large money laundering investigations and prosecutions are currently non-existent in the Cayman Islands and the use of the Financial Reporting Authority to initiate investigations is benign.
Byrne said he has split the police’s Financial Crime Unit into two. One arm will continue to focus on domestic crimes while the new unit will be specifically responsible for working with the Financial Reporting Authority to investigate suspicious transactions.
He added, “The focus has to change, we have to go in looking, asking questions, why did someone transfer this amount of money from one jurisdiction to another?”
The unit currently has three investigators working with a detective chief inspector, as well as consultants from the City of London police’s respected economic crime unit. Two more officers are expected to join mid-May. Byrne said the task force would use overseas officers on temporary contracts until permanent staff can be recruited.
“We are in an observational period. There is no time to sit back. We have to show we can get out and do what needs to be done,” he said. Government allocated additional funding to the Royal Cayman Islands Police Service to help fight financial crime during the last meeting of the house in April.
The creation of the new investigative unit is just one aspect of the national response to the findings of the FATF report. Premier Alden McLaughlin is chairing a working group of the various ministries and agencies responsible for ensuring follow-through on the report.
Byrne added, “It is the biggest news at the minute in terms of what we are addressing for the national economy.”
McLaughlin said in his Strategic Policy Statement in April that his government would act fast to implement the findings of the report.
He said, “I believe that the report’s recommendations will help to strengthen our jurisdiction. I have said before that Cayman does not need or want illegitimate business and we stand ready to do all that we can to resist any attempts at using our Financial Services industry for money laundering, terrorist financing or other illegal purposes.”