Cayman has set up a new office to spearhead the fight against illicit money, Premier and Finance Minister André Ebanks has said.
The Office for Strategic Action on Illicit Finance will act as a central authority designed to help keep the country in line with international standards, particularly those of the Financial Action Task Force.
Ebanks said the new office reflects an “unwavering commitment to effectiveness, not just technical compliance.”
“We must demonstrate that the Cayman Islands can swiftly and cohesively respond to the evolving threats of illicit finance, while meeting the FATF’s expectations for tangible outcomes.”
The new office will have oversight of the national coordination team preparing for the December 2027 inspection by a team from FATF – the international standard setter on financial regulation
Cayman was removed from a ‘grey list’ of countries subject to increased scrutiny at the end of 2024 after several years of work to improve its ability to monitor financial activity and investigate the illegal movement of funds. Staying off that watch list is considered crucial to the financial services industry.
The Caribbean FATF team will assess Cayman’s progress in achieving the organisation’s goals – indicators used to measure how efficiently countries combat illicit money in practice.
The islands’ status as a financial centre, with more than 100,000 registered companies and a growing niche in virtual assets, means expectations on law enforcement and regulatory agencies continue to expand far beyond what would be typical for a community of Cayman’s size.
Elisabeth Lees, who headed up the islands’ first anti-money laundering task force and is now in private practice with law firm Claritas, told the Compass last month that emerging threats in fintech and the need to secure money laundering convictions were the biggest challenges ahead of the next evaluation.
“It is important to understand and keep up with the evolving risks on things like virtual assets,” she said. “How are they being used and how are they being misused?
“I think Cayman has done a really good job so far.”
“Fortunately, we haven’t been subject to any of the scandals that have impacted other jurisdictions, and I think that is because there was that careful and detailed and robust examination process for these applications.
Focus on effectiveness
Government’s new office will also integrate the former Anti-Money Laundering Unit and other experts from Ebanks’ ministry to deliver progress on anti-money laundering, counter-terrorist financing and counter-proliferation financing aimed at preventing the use of dirty money to finance nuclear weapons programmes.
“The FATF’s global standards continue to evolve, placing increasing emphasis on effectiveness,” Ebanks said.
“OSAIF ensures we remain at the forefront of these developments … as a country of financial services integrity, particularly as we prepare for the 2027 CFATF evaluation.”
The financial services and commerce ministry added that bringing “fragmented” functions together and the creation of a “unified strategic and operational centre” would help the country to deter, detect and respond to illicit financial activity in Cayman and around the world.
Compass reporter James Whittaker also contributed to this article.
