In welcome news, a Financial Action Task Force (FATF) press release reporting the outcome of its October plenary meeting has confirmed that the Cayman Islands has been removed the FATF Grey List of jurisdictions subject to increased monitoring.
This followed an on-site inspection earlier this year, which concluded that the Cayman islands had satisfied FATF's Recommended Actions by.
- effectively implementing their beneficial ownership regime and
- demonstrating that money laundering cases are being prosecuted and resulting in effective and proportionate sanctions.
What impact does this have?
Removal from the FATF Grey List is a significant step.
Although the Cayman Islands remain on the EU's AML / CFT Black List (see our report from February 2022), their removal should now follow in due (and, hopefully, short) course.
Note that the FATF Grey List and the EU's AML Black List are different from the EU's so called 'Black List' of non-cooperative jurisdictions for tax purposes - a list from which Cayman was removed in October 2020.
This move will also be a relief ahead of the implementation of changes to the AIFMD - although these are unlikely to be in force until late 2025 or 2026 - which would require the jurisdiction of a non-EU AIFM or non-EU AIF not to appear on either EU Black List in order to be able to market to investors in the EU under Article 42.
