AML Compliance
The framework of laws and regulations designed to prevent, detect, and report money laundering (AML), terrorist financing (CFT), and proliferation financing (CPF) in the Cayman Islands.
Proceeds_of_Crime_Act_(2024_Revision).pdf, Anti-Money_Laundering_Regulations_(2025_Revision).pdf, Terrorism_Act_(2018_Revision).pdf, Proliferation_Financing_(Prohibition)Act(2017_Revision).pdf
2026-04-27
Cayman’s AML/CFT/CPF framework is based on international standards (FATF) and is primarily governed by the proceeds-of-crime-act-2024, the anti-money-laundering-regulations-2025, the terrorism-act-2018, and the proliferation-financing-prohibition-act-2017.
Core Obligations for Financial Businesses
Any person conducting "relevant financial business" must implement:
- Risk-Based Approach: Assessing and documenting ML/TF/PF risks.
- Customer Due Diligence (CDD): Identifying and verifying the identity of customers and beneficial-ownership.
- Ongoing Monitoring: Monitoring transactions to ensure they are consistent with the customer's known risk profile.
- Record Keeping: Maintaining all relevant records for at least five years after the relationship ends.
- Sector-Specific Rules: The AML regime explicitly covers dnfbps (like real estate agents, accountants, and lawyers) and mandates that Virtual Asset Service Providers (VASPs) adhere to the "Travel Rule" for asset transfers (source: anti-money-laundering-regulations-2025).
Targeted Financial Sanctions and Asset Freezing
Financial businesses must comply with international sanctions, particularly those adopted by the UN Security Council:
- Terrorist Financing (CFT): Under the terrorism-act-2018, institutions must immediately freeze assets of designated terrorists and report suspicions of terrorist property.
- Proliferation Financing (CPF): The proliferation-financing-prohibition-act-2017 mandates the freezing of assets linked to the proliferation of weapons of mass destruction and grants the FRA powers to issue binding directions for enhanced monitoring.
Key Appointments
Regulated entities must appoint individuals to specific roles:
- Anti-Money Laundering Compliance Officer (AMLCO): Responsible for overseeing the AML program and ensuring CIMA compliance.
- Money Laundering Reporting Officer (MLRO): The "Filter" who receives internal suspicious activity reports and determines whether to file a SAR with the FRA.
The Financial Reporting Authority (FRA)
The FRA is the Cayman Islands' Financial Intelligence Unit. It receives SARs, analyzes financial data, and disseminates intelligence to law enforcement agencies. Under the proceeds-of-crime-act-2024 and related acts, the FRA has the power to request information from any person to assist in its analysis and enforce targeted financial sanctions.