CAYMAN ISLANDS Law and Practice Contributed by: Daniel Lee, Sophia Scott, Kimberly Robinson and James Turner, Maples Group
and the exchange of information with the United States (US IGA). The Cayman Islands has also signed a multilateral competent authority agreement to imple - ment the OECD Standard for Automatic Exchange of Financial Account Information – Common Reporting Standard (CRS and together with the US IGA, AEOI). In addition, the Cayman Islands has enacted the Crypto-Asset Reporting Framework (CARF) Regu - lations, which came into force on 1 January 2026, implementing the OECD’s framework for the auto - matic exchange of tax information on transactions in crypto-assets between participating jurisdictions. The Cayman Islands’ commitment to commence CARF exchanges begins in 2027. Cayman Islands regulations have been issued to give effect to the US IGA and CRS (collectively, the “AEOI Regulations”). The CRS regulations were amended with effect from 1 January 2026 by the Tax Informa - tion Authority (International Tax Compliance) (Com - mon Reporting Standard) (Amendment) Regulations, 2025, which implement the OECD’s amended CRS and bring new financial assets, products and inter - mediaries within scope, including specific electronic money products and central bank digital currencies. The amendments also strengthen due diligence and reporting requirements and advance the CRS report - ing deadline. Pursuant to the AEOI Regulations, the Cayman Islands Tax Information Authority (TIA) has published guidance notes on the application of the US IGA and CRS. All Cayman Islands “FIs” are required to comply with the registration, due diligence and reporting require - ments of the AEOI Regulations, unless they are able to rely on an exemption that allows them to become a “Non-Reporting FI” (as defined in the relevant AEOI Regulations) with respect to one or more of the AEOI regimes, in which case only the registration require - ment would apply under the CRS. The different types of Non-Reporting FI under each AEOI regime are specified in the applicable AEOI Regulations. Cayman Islands FIs are also required to appoint a Principal Point of Contact (PPoC) located in the Cay - man Islands who is authorised to liaise with the TIA for CRS purposes. A PPoC may be either a natural person or a legal person, but must maintain a physical
address in the Cayman Islands (not merely a mailing or correspondence address). FIs registered with the TIA prior to the commencement of the CRS Amend - ment Regulations who had not yet appointed a PPoC in the Cayman Islands were given until 31 January 2027 to do so. Anti-Money Laundering and Countering of Terrorist and Proliferation Financing The Cayman Islands has enacted legislation aligned with international principles in preventing and detect - ing money laundering (AML) and combating terrorist and proliferation financing (CFT and CPF respectively) and breaches of applicable sanctions regimes. The principal legislation includes the Misuse of Drugs Act (As Revised), the Proceeds of Crime Act (As Revised) (PCA), the Terrorism Act (As Revised) and the Proliferation Financing (Prohibition) Act (As Revised). These statutes create offences relating to the launder - ing of the proceeds of crime. The Anti-Money Laundering Regulations (AMLRs) apply to anyone carrying out “relevant financial busi - ness in or from the Cayman Islands”, forming a busi - ness relationship or carrying out a one-off transaction. What constitutes “relevant financial business” is set out under Section 2 of the PCA and includes, among others, the following activities: • banking or trust business carried out by a person who is licensed under the Banks and Trust Compa - nies Act (As Revised); • insurance business and the business of an insur - ance manager, an insurance agent, or an insurance broker within the meaning of the Insurance Act (As Revised); • mutual fund administration or the business of a regulated mutual fund within the meaning of the Mutual Funds Act (As Revised); and • various other investment, financial, trading and lending activities falling within Schedule 6 of the PCA. As a general rule, entities that are registrable under FATCA/CRS will also be subject to the AML Regime.
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