Government reports on anti-money laundering progress

National coordinator for the Anti-Money Laundering Steering Group Elisabeth Lees, centre, participates in a Cabinet sub-committee meeting in May about the Cayman Islands’ response to the Caribbean Financial Action Task Force report.

Working relationships between local and public sector agencies are growing stronger as a result of the work by Elisabeth Lees, the national coordinator for the Anti-Money Laundering Steering Group, government stated in a press release.

Lees took on the role earlier this year in response to the Caribbean Financial Action Task Force assessment of Cayman’s anti-money laundering and counter-terrorism financing regime. The regional standard setting body placed Cayman under a one-year observation period to address the deficiencies identified in its evaluation report released in March 2019. Failure to do so could result see Cayman blacklisted with the FATF imposing a remediation plan.

The CFTATF requires, among other issues, a better understanding of the risks in the jurisdiction and that all entities that conduct relevant financial business implement robust anti-money laundering/countering the financing of terrorism (AML/CFT) measures.

Lees has spent the last few months working, along with the Anti-Money Laundering Unit, to coordinate the actions taken by the public sector to implement the recommendations in the report and to facilitate outreach to the private sector, government said.

Premier Alden McLaughlin said successful implementation of the CFATF recommendations requires continuous stakeholder engagement by the local public sector and industry. At a recent meeting of relevant public and private sector organisations, the premier reiterated the need for all agencies to work together to improve the Cayman Islands AML/CFT framework as a matter of national priority.

All public sector bodies involved in the CFATF response have begun making amendments to their processes and procedures to meet the February 2020 deadline, to ensure enhanced coordination and cooperation in relation to the jurisdictions’ AML/CFT regime. Self-regulatory bodies are also included in the coordination efforts and discussions with private stakeholders have included meetings with groups like the Cayman Islands Compliance Association.

Commenting on Lees’ appointment and her expertise as senior Crown counsel, Premier McLaughlin said, “With this role and others around the public service that focus on increased coordination and improved communication within our local financial and commercial sectors as part of this process, we are taking positive steps towards implementing the report’s recommendations.”

The national coordinator is one of more than 100 positions with roles to play in the AML/CFT fight that have been created with funding allocated over the next few years, the government statement noted. These positions were distributed between agencies such as the Royal Cayman Islands Police Service, Customs and Border Control, the Financial Reporting Authority and the Cayman Islands Monetary Authority.

A new working group that concentrates on fighting proliferation financing, or the financing of weapons of mass destruction, an area of focus in the CFATF report, has also been established, according to the government statement. The working group seeks to better understand and mitigate proliferation finance risk in the Cayman Islands. Members include representatives from the Office of the Director of Public Prosecutions, the Monetary Authority, the Financial Reporting Authority, the Shipping Registry and the Department of Commerce and Investment, as well as the Anti-Money Laundering Unit.

In addition to building local partnerships, the Cayman Islands has continued to work closely with the CFATF, Lees noted. On 22 and 23 May, Cayman hosted the CFATF’s Deputy Executive Director Carlos Acosta who met with each agency to discuss progress, answered queries and made suggestions. Later in May, a delegation from the Cayman Islands, headed by the attorney general, attended the CFATF Plenary. The Cayman Islands was also represented at the Financial Action Task Force (FATF) Plenary in February and June.

The steps taken to address the recommendations made by the CFATF include a new Cabinet subcommittee chaired by the premier which meets monthly to assess the progress made by relevant agencies. Other members of the subcommittee are the attorney general, the deputy governor and the ministers of financial services, finance and commerce.

New legislation in February recognised the Cayman Islands Legal Practitioners Association as the self-regulatory body for the supervision of lawyers. The association has delegated its supervisory functions to the Cayman Attorneys Regulatory Authority, which has begun to build its regulatory oversight framework. This includes the registration of law firms, including sole practitioners, for AML purposes this month.

In April, the Legislative Assembly approved extra funding to acquire IT and human resources for different agencies to address AML deficiencies.

On 11 and 12 June, James Hines, QC, held an anti-money laundering seminar for investigators, prosecutors and other relevant agencies. Hines spent over two months in Cayman assisting with the interim International Money Laundering and Terrorist Financing Investigative Unit of the RCIPS pending the recruitment of a dedicated Crown counsel for financial crimes.

Also, the Office of the Director of Public Prosecutions organised training for relevant agencies on terrorist financing investigations and prosecutions. This is led by an investigator with experience in the field and is a dedicated terrorist financing prosecutor from the Crown Prosecution Service in the UK.

And from 22 to 25 July, the Financial Reporting Authority brought together government departments, authorities, industry bodies and an expert from the UK Treasury for a series of public and private sector meetings on targeted financial sanctions.