AML/CFT Legislative Framework

The AML/CFT legal and regulatory framework in the Cayman Islands is continuously updated to address emerging risks and is aligned with the findings from the latest National Risk Assessment and the national AML/CFT Strategy. Cmrai has implemented several enhancements to its legislative framework to strengthen the jurisdiction's ability to prevent and detect money laundering, terrorist financing, and proliferation financing.

In addition to the Monetary Authority Act, the key pieces of legislation that support the AML/CFT framework include:

• Proceeds of Crime Act
• Anti-Money Laundering Regulations
• Proliferation Financing (Prohibition) Act
• Terrorism Act

The Proceeds of Crime Act, AML/CFT regulations, and Sanctions Orders establish a risk-based approach to the prevention and detection of money laundering and terrorist financing. This framework is further supported by The Terrorism (United Nations Measures) (Overseas Territories) Order 2001, The Anti-terrorism (Financial and Other Measures) (Overseas Territories) Order 2002, and The Terrorist Asset-Freezing Act 2010 (Overseas Territories) Order 2011.

Proliferation Financing (Prohibition) Act

The Proliferation Financing (Prohibition) Act empowers the Cayman Monetary Regulatory Authority International to take decisive action against individuals or entities involved in activities related to terrorist financing, money laundering, or the development of weapons of mass destruction. Orders issued under this Act are published in the Cayman Islands Gazette. The United Nations has adopted two resolutions related to anti-proliferation, specifically concerning North Korea and Iran. These resolutions are enforced in the Cayman Islands through orders passed in the UK, including the Iran (Restrictive Measures) (Overseas Territories) Order 2012 and the North Korea (United Nations Measures) (Overseas Territories) Order 2006.

Terrorism Act

The Terrorism Act is domestic legislation that criminalizes terrorism and terrorist financing, in line with the UN Convention on the Suppression of Financing of Terrorism. Under this law, the following actions are considered offenses:

1. Soliciting, receiving, or providing property with the intent that it be used, or having reasonable cause to suspect that it may be used, for terrorist purposes. The Act defines "property" broadly to include money, real or personal property, and intangible assets.
2. Using property for terrorist purposes or possessing property with the intent that it be used, or having reasonable cause to suspect that it may be used, for terrorist activities.
3. Entering into or being involved in an arrangement where property is made available to another, knowing or having reasonable cause to suspect that it will or may be used for terrorist purposes.
4. Facilitating the retention or control of terrorist property by concealment, removal from the jurisdiction, or transfer to nominees.

Section 200 of the Proceeds of Crime Act introduces an amendment to the Terrorism Act, stating that an individual commits an offense if they:

1. Use property for terrorist purposes.
2. Possess property with the intent that it be used, or have reasonable cause to suspect that it may be used, for terrorist purposes.
3. Possess or acquire property that they know or have reasonable cause to suspect has been used, directly or indirectly, in the commission of an act of terrorism.
4. Acquire property as a result of or in connection with acts of terrorism.