Cayman Islands Likely To Be Removed From FATF Blacklist In June

Caymannetnews

03 January 2001

This story is reproduced by kind permission of Caymannetnews at http://www.caymannetnews.com

Leader of Government Business, the Hon. Kurt Tibbetts, has clarified earlier media reports that the Cayman Islands was likely to be removed from the Financial Action Task Force (FATF) blacklist at its upcoming plenary session in February.

According to the GIS report, which was issued following the December 13 meeting in Miami between the seven-member Cayman Islands Government negotiating team, headed by Mr Tibbetts, and the 25-member FATF Review Group of the Americas, the information gathered by the review team during the course of the caucus was to be compiled into a report and forwarded to the FATF in time for its plenary session, which it billed for late January 2001. "It is expected that the FATF will decide at that plenary whether to de-list Cayman," the report said.

Immediately after this, it quotes Mr Tibbetts as saying: "Generally speaking...the Americas Review Group was very receptive to the progress the Cayman Islands has made towards becoming fully compliant with the FATF's anti-money laundering initiatives."

Speaking to Cayman Net News late Wednesday, 27 December, Mr Tibbetts said: "I said sooner rather than later; but I didn't say sooner meaning February. June is not far away....but I did not refer to any specific time-line."

He added: "Realistically, my understanding from talks with those people at the last trip was that they don't believe that anyone would get off in February; that once we followed our time-lines they thought that there was a very good chance to get off in June. And we were leading the pack with the get-off list."

Following the December 13 meeting, Mr. Tibbetts reportedly said: "The atmosphere was conducive. I think that for the first time the Cayman Islands delegation now has a clear picture of the direction we have to move towards in order to be de-listed ... we are confident that the matter will be resolved and that it will not be very long before the Cayman Islands is de-listed."

According to a well-placed source in the financial sector, who spoke on condition of anonymity, what Cayman needs to do to be removed from the black-list is to address the 25 areas at reference in the GIS report as "specific questions" regarding such issues as licensing and registration regime, customer identification, record keeping, compliance and enforcement and suspicious activity reporting and monitoring, to which the Cayman delegation was asked to respond during the December meet.

While some of the issues have already been addressed by the several legislative amendments the government made since the June sanction, the source said, there still remains a few areas with which the FATF is not fully satisfied. For instance, it was said, "they still think we place too much reliance on foreign authorities' assessment of local Bank branches."

According to the source, the Government delegation assured the FATF team that it was prepared to make amendments to the Bank and Trust Companies Regulations and the Mutual Funds Law so as to ensure that the Monetary Authority (CIMA) will carry out a full independent assessment of the aforementioned financial institutions. "So there is going to be more emphasis on carrying out due diligence at this end rather than simply relying on overseas authorities' assessments," our informant said.

As to how close the government was to complying with the 25 criteria set out by the FATF, the response was: "I think we are substantially there, but there are some changes that need to be made within the next little while."

And the likelihood of being taken off the black-list by February? "It is more likely that a removal from the list will take place perhaps at the next plenary which is in June, rather than in February...because of the timetable that is going to be necessary to actually implement some of the changes."

It was noted also that ".... in addition to making legislative changes, the FATF also wants to see how, in fact, these changes were going to operate."

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