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The Financial Action Task Force, the inter-governmental body set up to fight money laundering, has added the Cayman Islands to its "Monitoring List," aka “grey list” of jurisdictions working with the FATF to fix problems with their compliance regimes.
Such a list is not the same as a so-called “blacklist” of regimes deemed not to co-operate on compliance.
Recent evidence suggests that once the FATF has updated the Monitoring List, US financial institutions will be told and must bear this in mind when handling such jurisdictions, Maples Group, the Cayman Islands-based law firm, said in a briefing note.
“Again, based on prior practice, it is likely that the EU Commission will take this addition to the Monitoring List into account when updating its own list of 'high-risk third countries',” Maples Group said.
Maples reckons that the FATF’s listing should not affect existing representations or commitments made by tax authorities and regulatory authorities under agreements with the Cayman Islands in the area of international mutual tax cooperation. The listing isn’t a tax measure so would not, for example, have any impact on dealings with Cayman Islands counterparties under the European Union's DAC6 tax reporting regime, Maples Group continued.
The Paris-based organization late last week added Burkina Faso, the Cayman Islands, Morocco and Senegal to its list of jurisdictions under increased monitoring, joining 15 other countries. The countries deemed to have “strategic deficiencies” are Albania; The Bahamas; Barbados; Botswana; Cambodia; Ghana; Iceland; Jamaica; Mauritius; Mongolia; Myanmar; Nicaragua; Pakistan; Panama; Syria; Uganda; Yemen; and Zimbabwe. The FATF is no longer monitoring Trinidad and Tobago.