CIMA Imposes US$270k in Fines for Breaches of AML Regulations

This is one more example of increasingly consistent high-value fines imposed by CIMA under its administrative fines regime, and reflects the regulator’s continued focus on AML/CFT/CPF and Sanctions enforcement generally.

The fines, publicised by CIMA here, resulted from findings made by CIMA during an onsite inspection of the Licensee:

• Record keeping: failing to maintain records of the results of analysis undertaken as part of its transaction monitoring for at least five years following the termination of the business relationship (Reg. 31(1)(b) of the AMLRs);
• Transaction monitoring: failing to maintain a transaction monitoring system (Reg. 5(a)(ix) of the AMLRs and Rule 4.1 of the Rule on Internal Controls, 2007 (now the Rule and Statement of Guidance, Internal Controls for Regulated Entities);
• EDD: Failing to perform enhanced due diligence in instances of unusual or suspicious activity (Reg. 27(f) of the AMLRs); and
• Disclosure obligations: Failing to ensure that clients were provided with sufficient and timely disclosure regarding matters reasonably regarded as necessary to enable them to make informed decisions regarding securities investment business conducted with or through the Licensee (Securities Investment Business (Conduct of Business) Regulations 2003).

Since its introduction in 2019, the Administrative Fine Regime has been CIMA’s enforcement tool of choice for breaches of the Cayman Islands’ AML/CFT/CPF and Sanctions regime.  Each discretionary fine can be up to CI$50k (individuals) and CI$100k (body corporates) for “serious” breaches; and up to CI$100k (individuals) and CI$1m (body corporates) for “very serious” breaches.

Maples Group has significant experience in advising clients on CIMA enforcement matters, from onsite inspections through to enforcement action and appeals, including to the Grand Court of the Cayman Islands.  Please reach out if we can be of assistance.