Statement
on Progress against CFATF Recommendations

By
Premier Hon. Alden McLaughlin, MBE, JP, MLA

24
July, 2019

Mr.
Speaker support for the Cayman Islands Financial Services Industry
remains one of the key priorities for this Government.

The
conditions that attracted financial services providers to these
shores still underpin our success today - our adherence to the
framework of English Common Law, our tax neutral status and our
strong economy and stable and financially robust government.

Our
Financial Services Industry remains strong and resilient. Like many
of our competitors the Cayman Islands as a jurisdiction has seen the
increasing need to upgrade our regime to ensure that we are compliant
with the various supra-national bodies. Indeed the view of
Government is that as a world leading financial services centre we
have an obligation to ensure that our regulatory regimes are also
world class. And so over the years the jurisdiction, Government and
industry partners, have responded to the evolving regulatory
landscape and have put in place the necessary regulatory frameworks.

Some
of these measures have been necessary as Cayman plays its part in the
global fight to combat money laundering and to counter the financing
of terrorism. Others have been required to enable tax authorities in
other countries to access information they need in order to ensure
compliance with their own taxation regimes.

I
do not need to tell this House, Mr. Speaker, how many long hours we
have spent in this House as numerous bills have been passed into law.
Nor do I need to remind our partners in the industry how many long
hours have gone into working up the detail of those bills in such a
way as to meet regulatory requirements while still maintaining the
space for creativity and innovation that is the hallmark of financial
services in this jurisdiction.

So
it is, once again, Mr. Speaker that we are here at this meeting of
the House to consider yet more necessary changes to our legislative
framework. Some 11 bills are now before the House, each dealing with
some aspect of our anti-money laundering and counter financing of
terrorism regime.

Others
will speak to the details of those bills, Mr. Speaker, but taken
together they represent a robust response by this Government to the
recommendations made by the Caribbean
Financial Action Task Force in its March 2019 report. As such, they
are an important part of our country’s efforts to ensure we remain
compliant with international standards and
I therefore commend them to the House.

Significantly,
however, the CFATF’s recommendations do not just cover the
legislative framework for regulation. For the first time, they have
moved on to cover the effectiveness with which the legislation is
being implemented. We certainly understand the rationale for ensuring
that not only do we as a jurisdiction have the required regulatory
framework, but that we also have the mechanisms and people to ensure
that the framework is effective and can be proven to be so.

And
so, this Government is determined to respond positively to these
recommendations dealing with effectiveness as we are doing in keeping
the legislation itself up to date.

Doing
so requires a response from across government and partner agencies
including the Royal Cayman Islands Police Service. A Ministerial
Sub-Committee, which I chair, has been created to oversee the work of
the agencies and we have established a Financial Crime Focus Group to
ensure coordination and cooperation at the operational level between
law enforcement agencies. That Group will make recommendations to
enhance the quality of work related to the use of financial
intelligence, and the investigation and prosecution of financial
crime. 

Together
we are working through the detailed action plan that we published at
the end of April and which responds to all 63 of the CFATF’s
recommendations. We have appointed a National Coordinator to assist
with the coordination between agencies, committees and all
stakeholders involved in the implementation of the action plan.

The
commitment of the Cayman Islands to this process has also been
demonstrated by the funding of additional resources, over 100 new
positions, for agencies agreed during the March sitting of the
Finance Committee. This includes the strengthening of the dedicated
Anti Money Laundering Unit at the Cayman Islands Monetary Authority
and a dedicated cross border Money Laundering and Terrorist Financing
Task Force within the Royal Cayman Islands Police Service (for which
an interim team was put in place in April). All told we will be
investing several million dollars more to further strengthen our
regulatory regime. It is important to note that this will not be a
one-off expenditure.

We
are now monitoring the results of the actions that we have put in
place and we remain committed to taking any further action that may
be necessary as we ensure we rise to the challenge that the CFATF has
given us.

Inevitably
when dealing with effectiveness, it will take time before we are able
fully to demonstrate that the measures that we are putting in place
are working. However, I expect to be able to demonstrate progress as
part of the CFATF Enhanced Follow Up Process, when submissions are
made on 24th
September, 2019, in relation to both technical compliance
(legislative amendments) and effectiveness. This CFATF report will be
presented at the November 2019 CFATF Plenary meeting to be held in
Antigua.

I
am sure that Members on all sides, Mr. Speaker, will recognize the
importance of this work for the future of our Islands. Make no
mistake, this Government will take the action necessary to ensure
that our legislation is robust and that it is effectively
implemented.

I
have said previously in this House and elsewhere that Cayman does not
want or need to deal with those who would seek to hide money or use
it for illegitimate purposes. Our efforts in improving the
effectiveness of the implementation of our world-leading legislation
to protect the integrity of our financial services will mean that we
can demonstrate to the world that anyone attempting to use Cayman for
such illegitimate purposes will be caught and dealt with to the
fullest extent possible under the law.