The European Commission officially signalled the removal of the Cayman Islands and Jordan from its AML list of high risk third countries on 18 January 2024.
Its published Delegated Regulation (EU) 2024163 in the Official Journal of the EU, will come into force on 7 February 2024, resulting in the official de-listing of the two countries identified as having strategic deficiencies in their anti-money laundering/counter-terrorist financing regimes.
The Commission said it has reviewed progress in addressing the strategic deficiencies of the Cayman Islands and Jordan, based on the requirements of Directive (EU) 2015/849.
"Following the measures implemented to address the action plans agreed with the FATF, the Cayman Islands and Jordan have remedied the strategic deficiencies in their respective
"AML/CFT regimes and no longer pose a significant AML/CFT threat to the international financial system. Taking into account their relevance under the revised methodology, the
But the commission further said Albania, the Commission has not adopted measures under article 9 of Directive (EU) 2015/849 considering the mitigating measures included in the accession
negotiations that address the identified strategic deficiencies as provided by the revised methodology.
Regarding Panama, available information sources did not allow the Commission to conclude, at this stage, whether it addressed its strategic deficiencies, notably with regard to transparency of beneficial ownership.
The EU's decision to remove the Cayman Islands from the EU AML List is consistent with the Financial Action Task Force's recent assessment of the Cayman Islands and the recent removal of the Cayman Islands from the United Kingdom's list of high-risk countries for AML/CFT purposes.
In reaction to the news, Cayman Finance CEO Steve McIntosh credited public and private sector leadership for the progress that led to this important achievement.
“The Cayman Islands Government and financial services industry share a solid commitment to ensuring that our jurisdiction meets global standards while protecting the rights of investors, asset managers, and other clients.
“The EU’s acknowledgement of the strength of the Cayman Islands’ AML regime is just the most recent example of how we collaborate to translate that commitment into an effective legal and regulatory framework.”
The EU previously conducted a detailed assessment of the Cayman Islands tax regime and concluded that the jurisdiction met its standards for transparency, fairness and tax good governance.
Deputy Premier and Minister for Financial Services André Ebanks said in a press release, “The Cayman Islands Government fully understands the significance of this achievement, and what it means for our international reputation.
“My government colleagues and I are profoundly thankful for the dedication of the many civil servants, regulators and industry members who walked the talk, earning our regime this recognition as a sound place for business. And we reaffirm our commitment with each milestone we achieve.”
The EU’s decision improves choices for investors by eliminating a requirement that European investors conduct enhanced due diligence of Cayman Islands’ entities. The EU’s action means Article 4 of the EU Securitisation Regulation will no longer prohibit the establishment of securitisation special purposes entities (SSPEs) in the Cayman Islands. Investors will be able to choose to use a SSPE in the Cayman Islands or any other jurisdiction not featuring on the EU AML list.
“Ensuring our legal and regulatory regime meets global standards opens up new opportunities for investors,” concluded McIntosh. “We look forward to using this development to promote the Cayman Islands financial services industry as an innovative leader that offers stability and growth."
