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International Sanctions

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Sanctions to Combat Terrorist Financing 

The Cayman Islands (Cayman) is committed to implementing the UN Security Council Resolutions (UNSCRs), the European Union (EU) and the United Kingdom (UK) sanctions measures. Such sanctions are applied against countries, regimes or persons designated to be in violation of international laws. They are imposed with the intent of 1) changing the conduct of listed countries, regimes or persons; 2) imposing punitive measures when international peace and security are threatened and diplomatic efforts have failed; and/or 3) deterring, preventing or suppressing terrorist acts.

The UK Government passes Orders (“Orders”) in Council extending such sanctions to its Overseas Territories. These Orders have the force of law in the Cayman Islands, apply to all individuals and entities in the Cayman Islands, and breaches may constitute an offence for which fines and/or criminal convictions may result. Financial sanctions usually include prohibiting the transfer of funds and assets, directly or indirectly, to a sanctioned individual or entity, and a requirement to freeze their funds and assets. Other financial sanctions may also prohibit the provision of insurance and reinsurance, financial services, or financing for either specific sectors or target entities. Financial Services Providers operating in the Cayman Islands are required to comply with such sanctions.
 

Responsibility of Financial Services Providers

Financial Services Providers are expected, pursuant to the Money Laundering Regulations, to have systems and controls in place to conduct initial due diligence, for monitoring on an ongoing basis and reporting. Generally, the sanctions lists in force in the United Kingdom (HM Treasury) apply in the Cayman Islands. The lists issued in the United Kingdom (HM Treasury) might be different from lists issued by other countries, such as the United States (OFAC). As such, it is important that Financial Services Providers carefully select the sanctions lists against which they conduct their monitoring, as screening against sanctions lists that do not include at least all the sanctions applicable in the Cayman Islands may cause a Financial Services Provider’s monitoring to be deficient.

In the event of updates to the relevant sanctions lists, Financial Services Providers may discover that certain sanctions are applicable to one or more of their clients, existing or new. Pursuant to the Proceeds of Crime Law, the Money Laundering Regulations and the Terrorism Law, Financial Services Providers must file a Suspicious Activity Report to the Financial Reporting Authority if they discover a relationship that contravenes a sanctions order or a direction under the Proliferation Financing (Prohibition) Law. 

List of Sanctions applicable in the Cayman Islands

A list of orders in force in the Cayman Islands can be found here: Sanction Orders. While the Authority seeks to ensure that this list is accurate and complete as of the date indicated thereon, it is the responsibility of every Financial Services Provider to keep itself updated and to comply with the sanctions in force in the Cayman Islands. Official sanctions orders applicable in the Cayman Islands are published in the Cayman Islands Gazette..
 

Obtaining a licence under Restrictive Measures or UN Sanctions (Overseas Territories) Orders

The respective order should be consulted to determine if a licence is available allowing for activities that would otherwise be prohibited under the order. An application can be made under the relevant article of the respective order for a licence allowing for the desired activity that would otherwise be prohibited under the order. The application should be made in writing to the Financial Secretary of the Cayman Islands.
 

 

 
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