Cayman Islands Welcomes De-Listing by FATF; Anti-Money Laundering Systems Strong.

Business Editors

GRAND CAYMAN, Cayman Islands--(BUSINESS WIRE)--June 22, 2001

The Government of the Cayman Islands today welcomed the announcement by the Financial Action Task Force (FATF) on Money Laundering that the Cayman Islands has been removed from the list of non-cooperative countries issued one year ago.

In its report issued today, the FATF commended the Cayman Islands, stating that it had "taken concrete steps to implement legal reforms," and cited "significant improvements in its anti-money laundering systems." The FATF also announced its decision to withdraw the application of FATF Recommendation 21 to de-listed countries, under which FATF member countries were able to issue `business advisories' to their financial institutions.

"We are satisfied that the FATF has recognized our actions in response to the 25 evaluation criteria introduced in February 2000," said Hon. George McCarthy, Financial Secretary of the Cayman Islands. "As a major international financial centre, we are committed to ensuring that we keep pace with international standards. We remain focused on the principles, and recognize that our regulatory authorities and financial services providers must remain ever-vigilant."

The FATF Review Group of the Americas, which was responsible for producing the progress report on the Cayman Islands, among other countries, conducted an on-site visit in April 2001. Their technical report, submitted to the Plenary, confirms that the Cayman Islands is deemed compliant with the 25 criteria used for evaluation. The focus of their visit was largely on implementation and international cooperation.

The Cayman Islands reconfirmed to the FATF Plenary that it is fully committed to the fight against money laundering, and wishes to play an active role in the global anti-money laundering initiative. The Government stressed its continuing commitment to effective implementation of anti-money laundering measures in compliance with FATF standards.

"On 13 June, the Cayman Islands' Financial Reporting Unit (FRU) was admitted to the Egmont Group, an international organisation that includes over 50 of these similar agencies. In fact, the Cayman Islands FRU is a leader of its kind in the region," said Hon. David Ballantyne, Attorney General.

Since December 1996, following the introduction of the Proceeds of Criminal Conduct Law, the Cayman Islands has cooperated through its FRU on an "all crimes" basis, exchanging information with other jurisdictions in the fight against international crime. It has cooperated with Bahamas, Brazil, Canada, Germany, Hong Kong, Mexico, Peru, Russia, South Africa, the United Kingdom and the United States.

A Mutual Legal Assistance Treaty with the U.S. has been used over 180 times since 1990 to provide information to U.S. authorities in serious criminal cases. In addition, the Cayman Islands Monetary Authority (CIMA) provides assistance to overseas regulatory authorities including the U.S. Securities and Exchange Commission and the United Kingdom's Financial Services Authority.

"During the past year, the Cayman Islands government has worked in partnership with the private sector," said Hon. Kurt Tibbetts, Leader of Government Business. "The laws we have are designed to enable our authorities - and financial services providers - to continue to be effective in the international fight against money laundering. We were well placed to fine-tune these due both to the compliance culture in our industry and to the comprehensive anti-money laundering provisions already in place."

The Cayman Islands began passing laws relating to money laundering in 1984, and has continually amended them to keep pace with international standards. "We have been recognized by the U.S. and other countries as leaders in the region for our anti-money laundering efforts, and the amending legislation we introduced this past year reflects our continuing commitment to the fight against money laundering," added Mr. McCarthy.