Ethics and governance in the European Financial centers

The Jersey Financial Services Commission recently added the Cayman Islands to its list of countries and territories considered to have an equivalent anti-money laundering framework.

The move is being seen by the Cayman Islands Monetary Authority as being of significant benefit to Cayman-based financial institutions and their clients which do business with financial institutions in Jersey.

The recognition allows Jersey's customer identification procedures to be satisfied if the client has met Cayman's customer identification requirements. This potentially saves time and resources that would otherwise have to be spent processing and supplying duplicate know-your-customer documentation to Jersey.

Jersey's anti-money laundering legislation and guidance provide in certain circumstances for a financial services business to place reliance on another institution to conduct customer identification procedures, where the institution is subject to obligations equivalent to those in Jersey, and where an overseas regulatory authority supervises the institution.

The listing of Cayman comes after months of discussion between the Cayman Islands Monetary Authority (CIMA) and its Jersey counterpart, as well as CIMA's lobbying at international forums such as the Overseas Group of Banking Supervisors for reciprocal recognition of equivalent anti-money laundering/counter terrorist financing (AML/CFT) frameworks among jurisdictions.

"We are pleased that Jersey has now added us to its list. The issue of equivalency listings relating to AML/CFT regimes is something CIMA has been concerned about for some time," commented CIMA Managing Director Cindy Scotland.

"We continue to engage in bilateral negotiations with regulators in countries where Cayman is not currently listed as having equivalent AML/CFT regimes," she added.

Mrs Scotland further explained that collaboration between CIMA and the Jersey Financial Services Commission was being further extended through a memorandum of understanding on information exchange and cooperation, which has been approved by the Cabinet and is now being finalised


Source : Amanda Banks, Tax-News.com, London 16 August 2006