Blacklisting brief but impact unknown

Praising Financial Services Minister Wayne Panton for his urgent response to the brief blacklisting of the Cayman Islands by the UK’s Financial Conduct Authority (FCA), Cayman Finance CEO Gonzalo Jalles said the impact on the jurisdiction’s reputation may never be known. The list was published by the FCA on 18 July in response to a Freedom of Information Act request. It included Cayman, along with more than 90 other countries, many of which are unstable economies, but also Brazil, India, Israel and South Africa as well as Russia and the People’s Republic of China, though not any of the other British overseas territories or crown dependencies.

However, on 4 September the British watchdog confirmed that the list has been removed from its website and that it does not plan to publish such a list in the future.

The list was compiled based on what the FCA described as the level of risk they pose to its financial crime objectives linked to tackling money laundering, sanctions systems and controls, terrorist financing, and bribery and corruption. Cayman Finance had been critical not only of the fact that the Cayman Islands appeared on the list, but that the FCA did not publish or explain the methodology that led to the listing. However, the FCA has now committed to a full review of the methodology that resulted in the Cayman Islands being placed on the list.

“We are of course very pleased that the FCA has discontinued this list which we strongly felt lacked credibility. Unfortunately we will never know the extent of the negative impact the listing had on our reputation but hopefully organisations like the FCA are more careful with initiatives such as these in the future,” Jalles said.

Cayman Finance also said that they were supportive of the Cayman Islands Government in dealing with the issue and were very pleased with the urgency taken, in particular by the Ministry of Financial Services.

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