Portfolio Of Legal Affairs
Financial Reporting Authority
The Financial Reporting Authority (the FRA) is the financial intelligence unit for
the Cayman Islands established pursuant to the Proceeds of Criminal Conduct Law
(PCCL). The FRA receives, analyzes and disseminates financial information and intelligence
on suspected proceeds of crime, money laundering and terrorist financing.
The FRA’s Mission Statement is:
To serve the Cayman Islands by participating in the international effort to deter
and counter money laundering and the financing of terrorism.
It is well accepted that depriving criminals of their ill-gotten gains is an important
deterrent to criminal activity. The financial community has therefore been called
upon to assist in the fight against money laundering and terrorist financing activities.
The Financial Action Task Force 40 Recommendations on Money Laundering and Special
9 Recommendations on Terrorist Financing set international standards for measures
to fight money laundering and terrorist financing. One recommendation is that countries
should require financial institutions to report suspicions that funds are the proceeds
of criminal activity to a financial intelligence unit. The FRA, as the financial
intelligence unit for the Cayman Islands, is an integral part of Cayman’s participation
in the global fight against money laundering and terrorist financing.
The FRA receives reports on suspicious financial activity and other information
relevant to money laundering and terrorist financing from reporting entities. These
reports are referred to as Suspicious Activity Reports (or SARs). A reporting entity
that initiates the disclosure will have a defence to any potential money laundering
offence under the PCCL. The information received is subject to an in-depth analysis
to determine whether the information should be provided to law enforcement. Analysis
is enhanced by access to the Egmont Group. The Egmont Group is the international
group of financial intelligence units dedicated to the exchange of information,
intelligence and expertise to combat money laundering and financing of terrorism.
The FRA has been a member of the Egmont Group since 2001.
If the FRA determines through the analysis that there is cause to suspect criminal
conduct, the financial intelligence product will be provided to local law enforcement
agencies, overseas financial intelligence units (with the consent of the Attorney
General) and to the Cayman Islands Monetary Authority. Disclosures to law enforcement
can be made to report the possible commission of an offence, initiate or assist
a criminal investigation or proceeding or facilitate the effective regulation of
the financial services industry.
Although the FRA works closely with law enforcement it operates at arms length from
law enforcement. When the FRA determines that the information does not meet the
standard for disclosure to law enforcement, the information remains confidential
in the FRA database pending any further developments. The FRA is required by law
to protect the information it receives from unauthorised disclosure and has put
in place rigorous internal and external security measures to ensure that information
received is held in the strictest confidence.
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