Cayman Islands passes anti-money-laundering laws
Updated 12:33 PM ET July 25, 2000
GEORGE TOWN, Cayman Islands (Reuters) - The Cayman Islands
government has passed four anti-money-laundering bills in an effort to
confront critical scrutiny by international financial regulatory agencies
and the U.S. Treasury Department.
The bills were hurried through parliament Monday despite objections
from some members of parliament and lawyers that they were not given
enough time to examine or debate the bills.
The move came just one week after the U.S. Treasury Department issued
an "advisory" to U.S. banks about the Caymans' lack of
money-laundering regulation, and one month after the Financial Action
Task Force (FATF), a Group of Seven (G7) watchdog, listed the country
as lacking in financial controls to deal with criminal money-laundering.
The Cayman Islands, a tiny British territory in the Caribbean, is the
world's fifth-largest banking center with more than $500 billion of assets
at its 590 banks and trust companies.
The Financial Action Task Force (FATF), created a decade ago by the G7
economic powers to coordinate international efforts to halt
money-laundering, put the Caymans on its June 21 blacklist of 15
financial centers it deemed uncooperative in stemming the flow of
ill-gotten cash.
BILLS SAID FILLING GAPS
Cayman Islands Finance Minister George McCarthy said the bills passed
Monday will help the Cayman Islands "fill what overseas authorities have
expressed as significant gaps in (our) anti-money-laundering system."
At the same time, said McCarthy, the bills will prevent "fishing
expeditions" from other jurisdictions while allowing the Cayman Islands
Monetary Authority access to private banking information when
necessary.
Without the legislation, the Monetary Authority must obtain a court order
to inspect banking records, McCarthy noted.
In addition to the Monetary Authority law, other bills address the use of
computers and electronic mail for banking transactions. In addition, parts
of the Code of Conduct for the banking industry have been made
mandatory by law, rather than voluntary under the old system.
Not everyone was pleased with the speed that the government moved the
measures through.
Backbench Member of Parliament Kirk Tibbetts said he and his
colleagues "would have liked more time to peruse what was involved."
The Cayman Islands was "doing what it was doing to please another
entity (the U.S. Treasury)," Tibbetts added.
Alden McLaughlin, the president of the Caymanian Bar Association,
blasted the measures, saying the damaging advisories by the U.S.
Treasury and FATF had already been issued and both bodies
acknowledged that the Cayman Islands "was actively working to address
the alleged deficiencies and to be cooperating with the FATF," he said.
Attorney General David Ballantyne, who drafted and introduced the
measures for government, replied that the country had no "guarantee"
from the United States or the FATF that these measures would result in
favorable ratings on the financial regulation ladder, but "these steps were
taken to support the Cayman Islands' position."
