The Cayman Islands’ anti-money laundering regime is built on three primary instruments: the Proceeds of Crime Act (2025 Revision), the Anti-Money Laundering Regulations (2025 Revision) and the Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands (revised February 2024). Together, these establish the criminal offences, the detailed compliance obligations and the interpretive guidance that all regulated entities operating in or from the Cayman Islands must follow.
The Proceeds of Crime Act (2025 Revision)
The Proceeds of Crime Act (POCA) is the cornerstone of the Cayman Islands’ AML framework. It creates the primary criminal offences of money laundering – including concealing, converting, transferring or removing criminal property – and establishes the obligations and legal protections relating to suspicious activity reporting. POCA also provides the framework for civil recovery of assets derived from criminal conduct.
The Anti-Money Laundering Regulations (2025 Revision)
The Anti-Money Laundering Regulations (AMLRs) translate POCA’s broad principles into detailed, operational compliance obligations for entities conducting “relevant financial business.” The AMLRs set out specific requirements for customer due diligence, record-keeping, AML officer appointments, internal controls, staff training and independent audit. Compliance with the AMLRs is mandatory for all funds, investment managers and other financial service providers in the Cayman Islands that conduct relevant financial business.
The Guidance Notes (revised February 2024)
The Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing provide detailed interpretive guidance on applying the AMLRs in practice. Although the Guidance Notes are not themselves legislation, departure from their standards may be treated by CIMA as evidence of non-compliance with the AMLRs unless adequately justified – making them operationally binding in practice.
Counter-terrorism and proliferation financing legislation
The Terrorism Act (2018 Revision) and the Proliferation Financing (Prohibition) Act extend the Cayman Islands’ financial crime framework to counter-terrorist financing and proliferation financing respectively. Financial service providers must screen clients and transactions against relevant sanctions lists as part of their AML compliance programmes, and the February 2024 Guidance Notes update specifically strengthened obligations in this area.
Supervisory and reporting bodies
The Cayman Islands Monetary Authority (CIMA) is the primary AML/CFT supervisor for regulated financial service providers. The Financial Reporting Authority (FRA) is the Cayman Islands’ financial intelligence unit – the body to which all Suspicious Activity Reports must be submitted. Both bodies sit within a framework that has been assessed by the Caribbean Financial Action Task Force (CFATF) against international AML/CFT standards.
Navigating the Cayman Islands’ AML legislative framework requires precision – both in understanding which laws apply and in implementing procedures that will satisfy CIMA’s inspection standards.
Related questions: What anti-money laundering obligations apply to an investment manager running a Cayman-domiciled fund? | How does CIMA assess an investment manager’s AML framework during an on-site inspection? | What is the FATF (Financial Action Task Force) and how do its standards affect Cayman Islands businesses? | What AML staff training is required for regulated entities in the Cayman Islands?
WB Group provides AML compliance support for regulated entities across the Cayman Islands. Contact us to discuss your AML programme or visit our AML compliance service page.
FAQs
The Guidance Notes are not legislation, but CIMA treats compliance with them as indicative of compliance with the Anti-Money Laundering Regulations (2025 Revision). Departing from the Guidance Notes without adequate justification may be treated by CIMA as evidence of non-compliance with the AMLRs, making them operationally binding in practice.
CIMA’s Guidance Notes on the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing in the Cayman Islands were most recently revised in February 2024. The update incorporated strengthened guidance on proliferation financing, beneficial ownership and the application of a risk-based approach.
The Financial Reporting Authority (FRA) is the Cayman Islands’ financial intelligence unit. It receives and analyses Suspicious Activity Reports (SARs) submitted by regulated entities and shares financial intelligence with domestic and international law enforcement agencies.
Yes. Both investment funds and investment managers are subject to the Proceeds of Crime Act (2025 Revision) and the Anti-Money Laundering Regulations (2025 Revision) where they conduct “relevant financial business.” Each entity must maintain its own AML compliance programme and appoint its own AML officers.