Cyprus becomes equivalent jurisdiction to Cayman Islands
18 March 2015
Cayman Islands have recently recognized Cyprus as a jurisdiction having AML legislation equivalent to that of the Cayman Islands.
The above was announced in the Cayman Islands Gazette as an amendment to the Money Laundering Regulations (AML Regulations) which included Cyprus in the Third Schedule of the AML regulations. The Third Schedule contains the list of countries and territories with equivalent anti-money laundering legislation.
Benefits as a result of the inclusion
This development will greatly improve the efficiency with which services can be provided by Cypriot service providers to Cayman Islands funds - including fund administrators, brokers and custodians. This is so because Cyprus service providers are now able to undertake AML procedures functions and provide other client-onboarding services for Cayman Islands funds and other institutions, without needing to delegate those to group offices or outsource them to service providers in other jurisdictions which are deemed equivalent.
As a result of this development, Cypriot service providers are able to apply their own Cypriot AML procedures, rather than needing to comply with Cayman requirements when introducing a client to Cayman institutions, acting as fund administrator or making equivalent arrangements. In the context of Cayman Islands funds, the Board of Directors, General Partner or Trustee of the fund can now rely on the AML procedures of the Cypriot fund administrator. In addition, delegation of the AML functions to a Cypriot fund administrator allows the fund to satisfy its Cayman Islands legal and regulatory obligations.
Furthermore, Cayman Islands institutions may rely on the Know Your Client process carried out by Cypriot service providers instead of carrying out separate procedures to comply with Cayman Islands law. This is anticipated to enhance client referrals from Cyprus to Cayman Islands.
The inclusion of Cyprus on this list means that Cypriot entities, businesses and customers will benefit from lower risk ratings when interacting with Cayman funds and other institutions.
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