Cayman’s financial intelligence unit has busy year

(CNS): Some 320 reports of untoward financial goings on were reported to Cayfin during the 2008/2009 financial year compared to 247 the year before, representing a 29% increase in cases. The Financial Reporting Authority said 284 of those were completed before the fiscal year end and the organisation continued to work on the other 36. In its annual report the authority said that 61%of the cases reported to it were suspicious activity reports or fraud, while drug trafficking and tax evasion made up only 6% of the reports made to Cayfin this past year. (Director of Cayfin Lindsey Cacho)

The FRA, which is widely known as Cayfin, is a Financial Intelligence Unit (FIU) created by the Proceeds of Crime Law (2008), which came into force on 30 September 2008.  It is the Cayman Islands’ national agency responsible for receiving, requesting, analysing and disseminating disclosures of financial information concerning proceeds of criminal conduct, or in order to counter money laundering, terrorism, the financing of terrorism or suspicions of any of those crimes.

According to the report, total cases that the Cayman Islands investigates has increased steadily over the past five years, with 2008/09 representing the authority’s busiest year. The 320 cases it dealt with this year involved 435 legal entities and 545 people.

“During the past year we witnessed an increase of suspicious activities reported by the financial service providers, as well as requests for information coming from our overseas counterparts,” Lindsey Cacho, the director of the Financial Reporting Authority, says in his opening message in the report. “In spite of the economic downturn facing these islands as well as its effects worldwide, these increases may very well be attributed to the continued vigilance undertaken by the financial service providers and other entities.”

Despite the number of cases reported to Cayfin, however, well over one third was not acted upon. The FRA says that once it receives information regarding a potential crime, it is reviewed and a determination is made regarding onward disclosure. “Intelligence which does not meet the threshold for disclosure is retained in our confidential database pending any future developments,” the report stated.

Of the 320 cases received, 118 required no further action, 63 cases were disclosed to local law enforcement agencies, and onward disclosures to overseas agencies totalled 35, the report reveals. Cayfin says it released information to 36 different countries and noted that some cases were disclosed to multiple nations because of the international nature of the potential crimes. The United States made the most information requests, followed by the UK.

Almost a third of all cases reported to Cayfin came from banks; overseas financial intelligence units provide 20% of the reports and attorney’s 9%. The report also noted that this year there was a significant increase in reports coming from independent directors and the real estate sector.

The subjects of the reports came from 64 different countries and the greatest number was from the United States. The Cayman Islands was the next highest with 56 subjects being reported up from 36 last year.