Circular on AML/CFT remediation guidelines by CIMA
On 29 December 2023, the Cayman Islands Monetary Authority (CIMA) issued a Supervisory Information Circular outlining key aspects of effective AML/CFT remediation by financial service providers (FSPs). The circular emphasises the importance of compliance with regulatory frameworks and offers guidance for producing and implementing successful remediation plans.
Background: CIMA conducts onsite examinations to evaluate AML/CFT compliance and address deficiencies. Deficiencies identified during inspections prompt the issuance of requirements, specifying remediation actions within set timeframes.
Assessing compliance: CIMA utilises various tools, such as action plans, supervisory meetings, AML audits, and special advisors, to ensure timely and effective remediation. FSPs are increasingly recognising the significance of remediation efforts.
Supervisory inspection outcomes in figures: From January 2019 to June 2023, CIMA conducted risk-based inspections for 603 FSPs, issuing 5,262 requirements, with 93 per cent being met or in progress. Late requirements decreased by 20 per cent, and there was a 50 per cent increase in meetings with regulated entities to update the Authority on remediation progress.
Requirement for FSP reporting compliance with AML/CFT inspection findings and remediation programmes: FSPs are required to report monthly or quarterly on remediation progress, using a provided template (Work Plan). The Work Plan tracks requirements and facilitates communication between FSPs and CIMA.
Guidelines on completing the Work Plan: The circular provides examples of effective and ineffective approaches to reporting on AML/CFT requirements through the Work Plan. FSPs may request extensions, considered case-by-case, and, if granted, must provide a revised remediation action plan.
CIMA notifies FSPs once is satisfied with remediation, and the follow-up inspections may be conducted.
CIMA’s circular can be accessed here.
