September 27, 2020

Strengthening Cayman’s AML/CFT Regime: Private sector replies by 30 March 2015

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Solomon HarrisFrom Solomon Harris

The Cayman Islands Anti-Money Laundering Unit (‘AMLU’) is strongly encouraging private sector responses to its sector-specific National Risk Assessment (‘NRA’) questionnaires before the online survey closes on Tuesday, 30th March 2015. It considers that completion of the anonymous online questionnaires ‘in an honest and timely manner’ is key to ensure the Cayman Islands’(‘Cayman’) Anti- money laundering/Combating the Financing of Terrorism (‘AML/CFT’) regime is able to be robustly reviewed before the 2017 Caribbean Financial Action Task Force (‘CFTF’) mutual evaluation. The relevant laws, regulations and guidance were last looked at just over 2 years ago and it is particularly important to complete the technical compliance and effectiveness assessment to identify whether there are any issues that require attention so they can be addressed as soon as possible.

CFTF Mutual evaluation
Preparation of an NRA is a FATF 40 recommendation from 2012 and is a preliminary step before a mutual evaluation exercise by members of the CFTF. The mutual evaluation examiners will be looking closely at the NRA to determine how effective Cayman has been in identifying, assessing, and understanding money laundering and terrorist financing risks. Whilst the evaluation will take place in the first quarter of 2017 the Cayman NRA is expected to be completed by the end of 2015.

Preparation of the NRA
In 2014, the Cayman Islands Government contracted with the World Bank to provide technical assistance on a process to generate information for the preparation of the first NRA report (the ‘NRA tool’) and a draft action plan to address the possible outcomes of the NRA. Around 60 people from the Cayman Islands Monetary Authority (‘CIMA’), relevant government agencies, and representatives from the private sector make up the eight working groups. The private sector contributions will help AMLU working groups assess specific vulnerabilities within five sectors -1) Banking, 2) Securities, 3) Insurance, 4) Other Financial, and 5) Designated Non-Financial Businesses and Professions (‘DNFBP’s). In addition to the sector specific groups there are also working groups to assess National Threats, National Vulnerabilities and Technical Compliance & Effectiveness.

Information gathering
A key part of the process is gathering information from the private sector using online anonymous questionnaires which were devised in conjunction with the World Bank Technical Assistance Team (‘World Bank’). These questionnaires are designed to gather information from financial institutions and DNFBP on the vulnerabilities they face in their respective sectors. They can be completed by compliance officers (‘CO’s) or money laundering report officers (‘MLRO’s).

How it will work
At the launch of the NRA process back in October training was provided on AML/CFT, including the new FATF 40 Recommendations, with hands-on training sessions by the World Bank on the purpose and use of the NRA tool. Once each working group has the relevant information generated by the NRA tool it will draft a risk assessment report, explaining the results and the underlying facts. Then there will be a three-day workshop for the working groups, policy makers and the management of participating agencies to discuss both the NRA process and its results. The workshop will then carry out a final review and discussion of the NRA results, of any implementation issues and of a risk-based action plan. The World Bank will provide guidance throughout this phase, and will review the draft NRA report.

The NRA Survey Questionnaires
A link to each sector specific survey is provided below.
1. Banking Sector https://www.surveymonkey.com/s/HF3Q65D
2. Insurance Sector https://www.surveymonkey.com/s/HF8M9KP
3. Securities and Investment Sector . https://www.surveymonkey.com/s/5NNR5BT
4. Other Financial Sector https://www.surveymonkey.com/s/HNY8THS
5. Designated Non-Financial Businesses & Professions https://www.surveymonkey.com/s/ZQJ2K95

SOURCE: http://www.solomonharris.com/news-updates/strengthening-caymans-aml-cft-regime-private-sector-replies-by-30-march-2015

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