The Cayman Islands has identified US$8.4 billion in assets since 1 March under regulations sanctioning Russian companies and individuals over the country’s war in Ukraine.
This includes almost 300 million euros, which have been frozen since sanctions began.
Cayman financial services providers identified the assets in 801 compliance reports.
The amount is about US$1.1 billion higher than government reported in April.
R.J. Berry, director of the Financial Reporting Authority (FRA), said the value of sanctioned assets has increased because “Financial services providers continue to identify and report funds or economic resources owned or controlled, directly or indirectly, by designated persons, and are freezing those assets or economic resources.”
In addition, the FRA has received 144 suspicious activity reports (SARs) related to Russia sanctions, which have been cross-referenced with the submitted compliance reports.
Government established a task force of various government entities three months ago to coordinate the application of sanctions against Russia within the Cayman Islands and ensure that relevant agencies are implementing them effectively.
A goal of the taskforce was to solidify the Cayman Islands’ understanding of its exposure to individuals and entities that have been designated and are subject to sanctions.
Under the Russia sanctions regime, local financial services providers and financial institutions must check whether they maintain accounts or hold funds or any other assets for individuals named by the Office of Financial Sanctions Implementation of the UK’s HM Treasury.
In such cases, they must freeze the accounts or assets and report them to the Financial Reporting Authority, which may pass the information on to regulatory authorities and law enforcement.
Financial institutions are prohibited from dealing with the funds or making them available unless licensed by the governor.
Over the past three months, the sanctions task force has continued to monitor changes made by the UK government to its Russia sanctions regime.
Since February 2022, there have been ten amendments covering various measures to the UK’s Russia (Sanctions) (EU Exit) Regulations 2019.
Of these, seven amendments have since been extended to the Cayman Islands; amendment one was extended automatically with amendments two to seven reflected in the Russia (Sanctions) (Overseas Territories) (Amendment) Order 2022 that came into effect on 14 April 2022.
The UK government has also continued to update its Russia sanctions list frequently, with over 1,600 designations since the invasion of Ukraine.
Locally, the Financial Reporting Authority and the Cayman Islands Monetary Authority are responsible for posting and circulating Financial Sanctions Notices to enable relevant firms to comply with their obligations.
Meanwhile, the General Registry which registers local and overseas companies, and the Lands and Survey Department which registers land transfers within the Cayman Islands, continue to check their databases against the latest lists of sanctioned individuals and entities, government said in a press release.
To ensure wide awareness of the sanctions and their implications among local industry, the Sanctions Coordinator at the FRA participated in two outreach sessions in June 2022.
The first event was a presentation on the topic of the evolving sanctions landscape and provided key updates from the FRA. The virtual session was hosted by the School of International Financial Services (SIFS), attended by 140 people.
This was followed by a panel discussion entitled “Cayman Sanctions: The Basics and Beyond”, which was hosted by the Cayman Islands Legal Practitioners Association and the Alternative Investment Management Association.
While the task force is primarily focused on fulfilling its remit within Cayman, members are also cooperating internationally.
Governor Martyn Roper said Cayman’s “effective implementation of sanctions bolsters its strong reputation internationally as a highly responsible, efficient and professional financial services centre, as FCDO Minister for the Overseas Territories Amanda Milling confirmed on her visit earlier this year”.
Members of the Russia Sanctions task force are: the Financial Reporting Authority (Chair), Governor’s Office, Portfolio of Legal Affairs, Ministry of Financial Services and Commerce, Cabinet Office, Maritime Authority of the Cayman Islands, Cayman Islands Monetary Authority, Cayman Islands Bureau of Financial Investigations, Cayman Islands Customs and Border Control, General Registry, Civil Aviation Authority of the Cayman Islands and the Lands and Survey Department.
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