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The Cayman Regulator is being challenged in court over AML….!!!


One of Cayman's largest financial services and legal firms has filed an application for judicial review challenging how the Cayman Islands Monetary Authority (CIMA) is interpreting and applying certain provisions of the new Anti-Money Laundering Regulations that were implemented last year.

The Maples Group said it is turning to the courts to determine how financial service providers should be following the new rules after the regulator failed to address its concerns through the private complaints procedure.

Maples did not spell out the exact detail of the case in a press release announcing the decision, and the application has not yet been filed on the judicial services public register. However, they said the review would focus on CIMA's decision to impose obligations on MaplesFS Limited and Maples Corporate Services Limited that is not required under the AMLRs and, in any event, are disproportionate in the context of the particular services that these two entities provide.

The firm said it was fully supportive of the new initiatives to protect and enhance the integrity of the financial services industry here, but there was a need for clarification on the relevant points of law.

"The Maples Group's position is that CIMA has changed its approach to the application of certain provisions of the AMLRs without providing prior notice, consulting with industry stakeholders or issuing updated guidance notes," executives from the offshore firm said in a release. "Obtaining the court's ruling is therefore crucial to ensure that all financial service providers in the jurisdiction understand the standards to comply with the AMLRs, and that these standards are uniformly adhered to by all industry stakeholders."

Maples said if CIMA's interpretation of rules prevails, this would be contrary to the risk-based approach to client due diligence set out clearly in the AMLRs, and the internationally recognised standards upon which the AMLRs are based. The JR will provide certainty and benefit the regulated community within the Cayman Islands and their clients, the firm said.