The Cayman Islands is to be Removed from the EU AML List on 7 February 2024.
The Cayman Islands was removed from the FATF AML Monitoring List on 27 October 2023, with the FATF being satisfied as to the jurisdiction’s measures to detect and prevent money laundering, terrorist financing and proliferation financing. The UK followed suit on 5 December 2023, officially removing the Cayman Islands from its list of high-risk third countries for AML/CFT/CPF purposes.
It was widely anticipated that the removal from the FATF list would result in the jurisdiction being lifted from the EU Commission’s list of high-risk third countries (known as the EU AML List) at the next opportunity. This has now come to pass.
In an explanatory note to a proposal for a delegated resolution dated 12 December 2023, the EU Commission stated that, “The Cayman Islands … have strengthened the effectiveness of their AML/CFT regimes and addressed technical deficiencies to meet the commitments in their action plans on the strategic deficiencies identified by the FATF. The Commission’s assessment of the available information leads it to conclude that the Cayman Islands … no longer have strategic deficiencies in their AML/CFT regimes. It is therefore appropriate to delete the Cayman Islands … from the table in point I of the Annex to Delegated Regulation (EU) 2016/1675.”
The delegated resolution has now been approved and will take effect on 7 February 2024 (being 20 days after its publication in the Official Journal of the European Union). From that date, the Cayman Islands will again be a permissible jurisdiction for the establishment of securitisation special purpose entities (or “SSPEs”) for purposes of Article 4 of the EU Securitisation Regulation.
This positive result could not have been achieved without the steadfast diligence of the Cayman Islands’ government, with unwavering support from the financial services sector. Appleby welcomes the UK and EU’s recognition of the jurisdiction’s commitment to the highest international standards.
