CAYMAN ISLANDS AND MAURITIUS – HAVE YOU DONE YOUR IMPACT ASSESSMENT FOR EDD?

The JFSC is asking businesses with Connections to the CAYMAN ISLANDS to provide their supervisor with their proposed plan of action and timescales for completion by the end of March.

• https://www.jerseyfsc.org/news-and-events/2021-updates-to-the-amlcft-handbook-appendices/

As of February, the CAYMAN ISLANDS has been 'grey listed' by the Financial Action Task Force ('FATF'), citing weaknesses in the islands' AML/CFT regime, particularly in the areas of fines and enforcement actions.

• https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2021.html

FATF defines countries on their grey list as representing higher risk of money laundering and terrorism financing but who have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies.

However, firms should not ignore MAURITIUS – like THE CAYMAN, MAURITIUS is also on the same list. 

On 21st February 2020, the Financial Action Task Force's (FATF) included MAURITIUS on its Jurisdictions under Increased Monitoring'.

• https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html#mauritius

In response, the JFSC has classified both islands as a 'HIGH-ER RISK' country,

• https://www.jerseyfsc.org/media/4173/appendix-d2-aml-handbook-25-february-2021.pdf

And the addition to the above JFSC Appendix D2 will automatically fall into scope for ENHANCED DUE DILIGENCE.

Guernsey has not included CAYMAN on its list as of 5^th March – Mauritius is listed

• https://www.gfsc.gg/sites/default/files/2021-02/20210215%20-%20Appendix%20I%20-%20Countries%20That%20are%20Presenting%20Higher%20Risks.pdf

As a trigger event, regulated businesses should perform an IMPACT ASSESSMENT for any likely implications or actions necessary as a result.

Specifically, regulators will require that businesses with connections to the Islands provide their supervisor with their proposed plan of action and timescales to complete any needed remediation.

As a result, we would expect regulated businesses to:

1. Formally document their impact assessment across their book of clients - even if the conclusion is that there is no exposure to:
   • MAURITIUS
   • THE CAYMAN ISLANDS;
2. Update as necessary their AML/CFT business risk assessment and relevant policies and procedures, including controls on business acceptance and ongoing monitoring;
3. Identify existing customers with connections to MAURITIUS AND THE CAYMAN ISLANDS;
   • Including customer's source of funds and/or source of wealth as well as associated parties, incoming and outgoing funds;
4. Apply enhanced measures and update customer risk assessment as necessary;
5. Consider existing introducers/reliance arrangements on obliged persons from
   • MAURITIUS
   • THE CAYMAN ISLANDS;
6. Consider refreshing and/or rolling out AML/CTF training to their relevant staff to reflect these new provisions.