FATF Status

The Cayman Islands is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 27 October 2023

The FATF welcomes the Cayman Islands’ significant progress in improving its AML/CFT regime. The Cayman Islands strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2021 related to (1) applying sanctions that are effective, proportionate and dissuasive, and taking administrative penalties and enforcement actions against obliged entities to ensure that breaches are remediated effectively and in a timely manner; (2) imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up to date beneficial ownership information; and (3) demonstrating that they are prosecuting all types of money laundering in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions. The Cayman Islands is therefore no longer subject to the FATF’s increased monitoring process.

The Cayman Islands should continue to work with CFATF to sustain its improvements in its AML/CFT system.

European Commission List of Countries with Strategic Deficiencies in their AML/CFT Regimes

On 18 January 2024, the European Commission published the Delegated Regulation (EU) 2024163 (the "Regulation") in the Official Journal of the EU, pursuant to which the Cayman Islands will be removed from its list of 'high-risk third countries' ("EU AML List"), being countries identified by the EU as having strategic deficiencies in their anti-money laundering/counter-terrorist financing ("AML/CFT") regimes. The Regulation will come into force on 7 February 2024, resulting in the official de-listing of the Cayman Islands from the EU AML List on such date.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Cayman Islands was undertaken in 2021. According to that Evaluation, The Cayman Islands was deemed Compliant for 22 and Largely Compliant for 18 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

The economy of the Cayman Islands is predominantly fueled by financial services and tourism, which together contribute 50-60% to the Gross Domestic Product. With a high GDP per capita of approximately US$109,684, the territory is recognized for its status as a tax haven, attracting international businesses and affluent individuals.

The investment climate in the Cayman Islands is highly favorable, marked by a stable political environment and a strong legal framework that facilitates business operations. The absence of direct taxes and a well-regulated financial sector attract foreign investors, despite some criticism regarding money laundering and financial crimes that have led to enhanced regulatory measures.