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  4. CIMA advises e-KYC and remote CDD provisions

CIMA advises e-KYC and remote CDD provisions

22 Nov 2023
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On 9 November 2023, the Cayman Islands Monetary Authority (CIMA) published a supervisory information circular, advising that it recently updated its guidance notes on the prevention and detection of money laundering and terrorist financing to incorporate e-KYC and remote CCD/ongoing monitoring provisions. The amendments, effective from August 2023, address queries from financial service providers (FSPs) seeking clarification on the compatibility of CIMA's anti-money laundering/counter financing of terrorism/counter proliferation financing supervisory framework with technological solutions for remote, virtual, or non-face-to-face onboarding and ongoing customer due diligence.

Key changes include defining remote onboarding, e-KYC, and video-conferencing, emphasising risk assessments for money laundering (ML) and terrorist financing (TF), specifying procedures for digital ID technology, allowing the use of video conferencing for legal persons, and permitting digital ID systems/e-KYC processes with lower levels of assurance to be sufficient for simplified due diligence in cases of low ML/TF risk.

FSPs are required to maintain robust policies, conduct formal risk assessments, and ensure easily accessible records of identification data obtained through digital ID systems. CIMA encourages responsible adoption of remote technologies but stresses effective risk management.

CIMA’s circular can be found here.

Authors
Juan Pablo Urrutia
Partner | Funds & Regulatory | Cayman Islands