Cayman Islands AML update: 31 December 2018 AML officer deadline reminder and amended guidance notes

Investment Funds that already existed on 1 June 2018 and which are registered with the Cayman Islands Monetary Authority (CIMA) as mutual funds have to notify CIMA with details of the natural persons, at the managerial level, appointed as their AML Officers¹. These appointments had to be made by 30 September 2018, and the notification has to be filed on CIMA’s REEFS portal by 31 December 2018.

For investment funds that are not CIMA regulated (eg private equity funds and exempt mutual funds) and which were in existence prior to 1 June 2018:

• appointments of AML Officers must be made by 31 December 2018, and
• there is no requirement for them to make any filings with any Cayman Islands authority regarding the details of their AML Officers.

Investment Funds formed on 1 June 2018 have had to make these appointments from launch.

CIMA has not issued specific guidance on AML Officer appointments for investment managers registered as excluded persons under the Securities Investment Business Law, which were in existence before 1 June 2018. Excluded persons probably also have until 31 December 2018 to make these appointments, however, and include those details in their annual declaration in early 2019.

AML Officers can be provided by an investment fund or manager’s service providers. Harneys Fiduciary offers AML Officer services, and additional information on our Compliance Outsourcing services can be found here.

Amended AML guidance notes published

CIMA also issued amendments to the AML guidance notes² last week, incorporating and clarifying guidance issued by CIMA during 2018 for financial service providers (FSPs), including Cayman Islands investment entities. The amendments address:

• The different requirements for FSPs to consider and implement when deciding whether to rely on a third-party service provider to perform some of an FSP’s AML and compliance functions and or delegate the performance of those functions to a third party.
• That verification of the identity of a client may not be required at the time of receipt of certain payments by bank transfer in low-risk scenarios when payment is from an account in the client’s name at a Cayman Islands licensed bank or a licensed bank in an equivalent jurisdiction. Verification must still be conducted in the usual way before the payment of any proceeds is made.
• The need for natural persons appointed as money laundering reporting officers and deputy money laundering reporting officers to be independent and autonomous have sufficient time to perform their duties, and access all relevant material to perform their role.

Harneys’ Investment Funds and Regulatory team is well-versed in all aspects of Cayman’s AML requirements, so please contact your usual Harneys contact if you would like advice on compliance with the AML regime in Cayman.

¹ Money laundering reporting officer, deputy money laundering reporting officer and AML compliance officer (together AML Officers).

² The Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands, 13 December 2017.