The Cayman Islands Pleads to be Removed from the FATF’s ‘Gray List’ of Jurisdictions Suspected of Money Laundering

Richard M. June 20, 2023 4 minute read

An initiative by the Cayman Islands in France, on June 19th, asked the Financial Authority Task Force (FATF) to remove the country from the “grey list” of countries subject to greater scrutiny due to the lack of action against money laundering and terrorism financing.

The Cayman Islands urged the financial authority task force (FATF) to be removed from the French grey list. Members of the Cayman Islands appeared before the Financial Action Task Force (FATF) Plenary to be removed as a money laundering and counterterrorism financing monitoring jurisdiction. Before the plenary, a Ministry of Financial Services delegation met with European stakeholders to discuss anti-money laundering, taxation, and beneficial ownership issues.

The Cayman Islands was represented at the conference in Paris by the Attorney General, Samuel Bulgin, KC, the Finance Minister and Francis Arana, the head of the Anti-Money Laundering Unit.

An essential role of the FATF is establishing a global standard for anti-money laundering (AML) and monitoring countries to ensure they comply with this standard. As part of the FATF’s determination process, the FATF Plenary will determine whether the relevant government has complied or failed to comply with the FATF Recommendations at one of its three annual meetings (usually in February, June, and October).

A jurisdiction that has “strategic deficiencies” either needs to be monitored more closely (otherwise known as the “grey list“) or will be considered a “high risk” jurisdiction (otherwise known as the “black list“).

The Cayman Island must still decide whether it should remain on the high-risk jurisdiction list due to deficiencies in preventing money laundering and terrorist financing or whether it should be removed. They are expected to decide in June or at the meeting in October.

In October 2022, the FATF Plenary discussed how this impacts the Cayman Islands (the first meeting held by the FATF under the two-year Singapore Presidency of T. Raja Kumar). The Cayman Islands have been placed on a “grey list” due to its analysis of the effectiveness of its AML/CFT regime. This year, the Cayman Islands may come off the “grey list” if FATF views the Cayman Islands positively at its next plenary (as expected in June or October 2023).

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THE CAYMAN ISLANDS LEAD OVERSEAS DELEGATIONS DISCUSSING ACTIONS TO BE REMOVED FROM FATF’S GREY LIST