Cayman: Money laundering regulations amended

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The Third Schedule of the Money Laundering Regulations (2010 Revision) has been amended to include India and the People’s Republic of China, after approval by Cabinet.

Countries named in the Third Schedule of the Law have laws and regulations in place that are considered to be equivalent to those of the Cayman Islands, in terms of the identity documentation required from anyone who seeks to carry out business or one-off transactions in Cayman.

In practice the list of schedule 3 countries minimises the duplicate due diligence and collection of identity documentation from new and potential clients by Cayman Islands-based financial services providers.

For example, it allows financial services providers in Cayman to accept potential clients from listed countries, if they are regulated by an overseas regulatory authority.

In addition, placing India and China on the list of approved countries allows Cayman based financial institutions to accept client introductions from service providers in those countries. In these cases the typical know your customer due diligence procedures for a potential client can be left to financial institutions and professional intermediaries in the listed countries, if these are willing to certify that they have satisfactory evidence of the identity of an introduced client on file and are willing to share it on request.

The amendment to include China and India in the list of approved countries comes two months after CIMA announced a review of its anti money laundering regulations. The review was prompted by findings of the US Senate Subcommittee on Investigations indicating deficient anti money laundering procedures at a Mexican subsidiary of HSBC involving Cayman Islands bank accounts.

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