AML/CFT Legislative Framework

The AML/CFT legal and regulatory framework of the Cayman Islands is responsive to emerging risks and is informed by the themes from the latest National Risk Assessment and the national AML/CFT Strategy. CIMA has undertaken several refinements to its legislative framework to enhance the jurisdiction's regulatory landscape for preventing and detecting money laundering, terrorist financing and prolifration financing in the Cayman Islands.

Subsidiary to the Monetary Authority Act, other key legislation include:

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

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

Proliferation of Financing (Prohibition) Act

The Proliferation Financing (Prohibition) Act, empowers the Cayman Islands Monetary Authority to take action against persons engaged in activities that may have some connection with terrorist financing, money laundering or the development of weapons of mass destruction. Orders issued under the Proliferation Financing (Prohibition) Act are published in the Cayman Islands Gazette. The United Nations has passed two resolutions relating to anti-proliferation, one related to North Korea and the other related to Iran. These resolutions are in force in the Cayman Islands via orders passed in the UK, namely 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 a domestic legislation criminalising terrorism and terrorist financing, the latter in accordance with the UN Convention on the Suppression of Financing of Terrorism. In accordance to the law, it is an offence:

1. to solicit, receive or provide property intending that it be used, or having reasonable cause to suspect that it may be used, for the purposes of terrorism. Section 2 defines property as including money and all other property, real or personal, including things in action and other intangible property. Section 18 defines 'terrorist property' as property which is 'likely to be used' for the purposes of terrorism and proceeds from the commission of acts of terrorism.  
2. for a person to use property for the purposes of terrorism or to possess property intending that it be used, or having reasonable cause to suspect that it may be used, for the purposes of terrorism. 
3. for a person to enter into or become concerned with an arrangement as a result of which property is made available to another knowing or having reasonable cause to suspect that it will or may be used for the purposes of terrorism. 
4. to enter into or become concerned with an arrangement which facilities the retention or control by or on behalf of another person of terrorist property by concealment, by removal from the jurisdiction or by transfer to nominees.

Section 200 of the Proceeds of Crime Act notes an amendment to the Terrorism Act by stating that a person commits an offence if:

1. he uses property for the purpose of terrorism;
2. he possesses property and intends that it should be used, or has reasonable cause to suspect that it may be used for the purpose of terrorism;
3. he possesses or acquires property which he knows or has reasonable cause to suspect has been used, directly or indirectly, in the commission of an act of terrorism; or             
4. acquires property as a result of or in connection with acts of terrorism.