GFSC Instruction (Number 012021) for Specified businesses
Following the statement issued on 26 February 2021 by FATF adding the Cayman Islands to its list of jurisdictions under increased monitoring, the Guernsey Financial Services Commission (the ‘Commission’) announced that the Cayman Islands would be removed from Appendix C- Equivalent Jurisdictions and added to Appendix I- Jurisdictions under increased monitoring. Application of the SB Instruction 01-2021 means that specified businesses must ensure that they comply with the following by 30th of September 2021:
- Specified businesses must identify business relationships where reliance have been placed on paragraph 6 – Customer due diligence for low risk relationships or paragraph 10 – Introduced business of Schedule 3 or chapters 9 -Simplified CDD and 10 – Introduced business of the Handbook regarding Appendix C Businesses, Intermediary Relationships and Introduced Business where the introducer, intermediary or Appendix C business is a Cayman Islands’ financial services business.
- Where reliance has been placed on an introducer in accordance with paragraph 10 of Schedule 3, ensure that CDD measures for each of those identified business relationships required under the Customer due diligence-paragraph 4 of Schedule 3and associated rules in the Handbook are met.
- Where customer carries on business in the Cayman Islands which is regulated and supervised for anti-money laundering and terrorist financing purposes and to which the measures in section 9.6-Appendix C Businesses of the Handbook are applied, it must ensure that the customer identification and verification measures under paragraph 4 of Schedule 3-Customer Due Diligence and associated rules in the Handbook are met.
- Where the intermediary is treated as the customer in accordance with CDD for low risk relationships- paragraph 6 of Schedule 3 and rules governing intermediary relationships-section 9.8 of Chapter 9 of the Handbook for the business relationship identified in point 1 , the specified business must either:
- Ensure that the correspondent relationship requirements-paragraph 5(1)(b) of the Schedule and the Correspondent relationship rules section 8.6 of the Handbook are met; or
- Ensure the measures required under paragraph 4 of the Schedule and associated rules in the Handbook regarding CDD are met for each of the intermediary’s customers.
- Specified businesses must notify the Commission if unable to remediate any business relationship in accordance with the above by 30 September 2021, detailing the additional risk controls put in place for those business relationships. If CDD cannot be completed, a specified business should, in accordance with paragraph 9 of Schedule 3 and rules in section 4.7 of the Handbook terminate the business relationship and consider whether a disclosure should be made to the Financial Intelligence Service
- Specified businesses must review all business relationships for which the Cayman Islands is a relevant risk factor to assess its risk exposure, and where the level of risk has changed take relevant mitigating measures by 30 September 2021.