In a notification dated 24 September 2018 the Cayman Islands Monetary Authority (‘CIMA’) has extended the deadline set for regulated funds to notify it of the appointment of Anti-Money Laundering Officers (‘AML Officers’) from 30 September 2018 to 31 December 2018. This extension applies to the notification requirement only and regulated funds must still appoint their AML Officers by 30 September 2018.
How does the notification work?
Cayman Islands (‘Cayman’) regulated funds still need to appoint natural persons as AML Officers by 30 September 2018 and be able to demonstrate their compliance with that requirement by submitting to CIMA the information it requires via CIMA’s Regulatory Enhanced Electronic Forms Submission (‘REEFS’) Portal. The original deadline for that notification was also 30 September 2018, but this has now been extended.
Who are the AML Officers?
The AML Officers are the Money Laundering Reporting Officer (‘MLRO’), Deputy Money Laundering Reporting Officer (‘DMLRO’) and Anti- Money Laundering Compliance Officer (‘AMLCO’), collectively known as the AML Officers. The functions of MLRO, DMLRO and AMLCO may be delegated to service providers subsequently to the appointment of natural persons to those positions.
What entities are affected?
The extension of time until 31 December 2018 affects the obligation on regulated funds to notify CIMA that the fund has complied with its appointment requirements. It does not extend time to make those appointments. The Cayman AML Regime applies to Cayman domiciled entities (‘Financial Service Providers’ or ‘FSPs’) which conduct ‘relevant financial business’. That definition includes regulated investment funds registered with CIMA.
What about unregulated funds?
Whilst unregulated funds have an obligation to appoint AML Officers and should have these appointments in place by December 31, 2018 there is no current requirement for those funds to confirm those appointments to CIMA.
What are the implications for non-compliance?
CIMA has the power to fine for non-compliance. Accordingly, we recommend that clients ensure that they are compliant with the new AML Regime in a timely manner.
Where can I find more information on Cayman’s AML regime?
More information may be found in these pieces on our website: CIMA answers fund FAQs on anti-money laundering regulations ; Changes to the Cayman Islands Anti-Money Laundering Regime: what you need to know. It is important to check regularly for any updates to the regime as CIMA may need to make amendments once it has finished assessing the results of its consultation on its Guidance Notes on the Prevention and Detection of Money Laundering.
Latest AEOI Portal Updates
On 14 September 2018 the Department of International Tax Compliance’s News and Updates page was updated to include a reminder that the portal is open, and:
-a new section G for Common Reporting Standard (‘CRS’) Error Notifications. This advises that Principle Points of Contact will be informed via email if a 2017 CRS return requires correction and that Guidance can be found in Module V, Section 4, p.97 of the User Guide;
-detailed amendments to section F These concern remediation of notifications by the US Internal Revenue Service of Foreign Account Tax Compliance Act errors.
o For 2014 and 2015 period end returns the section states that Cayman reporting Financial Institutions must not attempt to address any IRS notifications.
o For 2016 and 2017 period end returns remediation is required by 7 December 2018. Section F contains specific do’s and don’ts on what errors must be corrected and advice to check the error notification in Module IV, section 5, p.53 of the User Guide.
Although Solomon Harris is not currently offering the services of MLRO, DMLRO or AMLCO, we can refer clients to relevant service providers who are offering such services. If you would like any further information on Cayman AML legislation then contact your usual contact at Solomon Harris or Richard Addlestone at or Nick Reid.
The information contained in this note is necessarily brief and general in nature and does not constitute legal advice. Appropriate legal or other professional advice should be sought for any specific matter.