30 September 2018 is the date by which all existing "in-scope" Cayman Islands investment entities must have appointed AML Officers.1
As discussed in recent client updates, entities will be "in-scope" if they conduct "relevant financial business" in or from within the Cayman Islands.2
This will include all Cayman Islands investment entities, whether regulated or unregulated (including all hedge funds and private equity funds), structured finance vehicles and entities conducting securities investment business.
In-scope entities need to:
(a) Appoint AML Officers. All in-scope entities must appoint an Anti-Money Laundering Compliance Officer, a Money Laundering Reporting Officer and a Deputy Money Laundering Officer (together the "AML Officers") in accordance with the Anti-Money Laundering Regulations (2018 Revision) of the Cayman Islands (the "AML Regulations").
The AML Regulations (and associated guidance) require that the AML Officers be natural persons who have:
(i) sufficient skill, experience, seniority, authority and resources to perform the role;
(ii) specific knowledge regarding the applicable Cayman Islands legislative, regulatory and other requirements; and
(iii) the ability to carry out their duties and responsibilities without any conflict of interests.
An in-scope entity might consider appointing AML Officers from one of its existing service providers, such as persons designated by its investment manager or administrator (if applicable), or appointing persons from an external compliance provider.
(b) Notify CIMA (if applicable). All fund entities registered with or licensed by the Cayman Islands Monetary Authority ("CIMA") that have not already filed the prescribed details of their AML Officers with CIMA must do so by 30 September 2018.
The AML Officers will also need to ensure that their in-scope entity has adequate procedures in place in accordance with the AML Regulations for identification, verification and diligence of all existing and future investors (including appropriate checks against global sanctions and watch lists).
CIMA has the power to fine entities that are in breach of these requirements and the fines can be significant.