Positive Development for the Cayman Islands: EU AML Delisting Process Commences

On 12 December 2023, the European Commission published Commission Delegated Regulation (EU) (the “Delegated Regulation”) amending Delegated Regulation (EU) 2016/1675 to update its list of ‘high-risk third countries’ (“EU AML List”) identified as having strategic deficiencies in their anti-money laundering/counter-terrorist financing (“AML/CFT”) regimes.

The Delegated Regulation provides for the removal of the Cayman Islands from the EU AML List. The Commission consulted the EU’s Expert Group on Money Laundering and Terrorist Financing before adopting the Delegated Regulation. It will now be examined by the Council of the EU and the Parliament. If neither objects, it will be published in the Official Journal of the EU and will enter into force 20 days after publication.

This development marks the first formal step in the process to remove the Cayman Islands from the EU AML List and affirms that the Cayman Islands has robust and effective AML/CFT regimes in place, reflecting the jurisdiction’s commitment to maintaining a compliant financial sector that aligns with global standards.

Additionally, as of 5 December, the UK Government has officially removed the Cayman
Islands from its list of high-risk third countries for AML/CFT/CPF purposes.

These developments follow the Financial Action Task Force (“FATF”) removing the Cayman Islands from its increased ‘monitoring list’ (often referred to as the FATF Grey List) on 27 October 2023.

On 15 December 2023, the Ministry of Financial Services & Commerce of the Cayman Islands Government issued an Industry Advisory welcoming the UK and EU’s recognition of the jurisdiction’s adherence to international AML/CFT standards.