UPDATE: The EU officially removed the Cayman Islands from its list of high-risk third countries with anti-money laundering, countering the financing of terrorism and counter-proliferation financing (AML/CFT/CPF) deficiencies on 7 February.
The EU Commission removed the Cayman Islands from its AML list following the publication of its Delegated Act. Cayman's delisting from the EU AML list was in line with previous EU protocol.
(CMR) The European Union has revised its list of high-risk countries for anti-money laundering purposes, removing the Cayman Islands from the list effective next month.
The European Union published the revised list in its Official Journal on 18 January 2024; however, the updated EU AML list and Cayman’s removal will become effective 20 days after this publication on 7 February.
Cayman's removal from the EU list comes after its removal from the UK blacklist and its FATF delisting. As of 5 December, the UK Government officially removed the Cayman Islands from its list of high-risk countries for AML/CFT/CPF purposes.
The EU Commission, in announcing the revised list of high-risk countries, recognized Cayman’s successful completion of its Financial Action Task Force (FATF) review process in October 2023.
“The Cayman Islands and Jordan have strengthened the effectiveness of their AML/CFT regimes and addressed technical deficiencies to meet the commitments in their action plans on the strategic deficiencies identified by the FATF,” the regulation states.
“The Commission’s assessment of the available information leads it to conclude that the Cayman Islands and Jordan no longer have strategic deficiencies in their AML/CFT regimes. It is therefore appropriate to delete the Cayman Islands and Jordan from the table in point I of the Annex to Delegated Regulation (EU) 2016/1675,” it added.
Cayman Finance CEO Steve McIntosh credited public and private sector leadership for the progress that led to this important achievement.
“The Cayman Islands Government and financial services industry share a solid commitment to ensuring that our jurisdiction meets global standards while protecting the rights of investors, asset managers, and other clients,” McIntosh said.
“The EU’s acknowledgment of the strength of the Cayman Islands’ AML regime is just the most recent example of how we collaborate to translate that commitment into an effective legal and regulatory framework,” he added.
Cayman Finance explains that Cayman's removal from EU list will lead to a reduction in enhanced due diligence for many entities and improve choices for investors.
The EU’s action also means Article 4 of the EU Securitisation Regulation will no longer prohibit the establishment of securitization special purposes entities (SSPEs) in the Cayman Islands. Investors will be able to choose to use an SSPE in the Cayman Islands or any other jurisdiction not on the EU AML list.
“Ensuring our legal and regulatory regime meets global standards opens up new opportunities for investors. We look forward to using this development to promote the Cayman Islands financial services industry as an innovative leader that offers stability and growth,” McIntosh added.
Deputy Premier and Minister for Financial Services André Ebanks said, “The Cayman Islands Government fully understands the significance of this achievement and what it means for our international reputation. “
“My Government colleagues and I are profoundly thankful for the dedication of the many civil servants, regulators and industry members who walked the talk, earning our regime this recognition as a sound place for business. And we reaffirm our commitment with each milestone we achieve,” Ebanks stated.
He further stated, “Discussions between the EU and the Cayman Islands – on a range of financial services- related matters, including our delisting – have been incredibly useful in deepening our mutual understanding, and I particularly note the positive, open approach that increasingly characterizes our relationship. Being removed from the EU’s AML list paves the way for further dialogue on the policy goals we pursue.”