In a recent visit to Washington, DC, Minister of Financial Services the Hon. Tara Rivers, JP, MLA; and representatives from the Ministry of Financial Services continued educating influential US lawmakers and regulators about Cayman’s global leadership on financial supervision, and also discussed correspondent banking matters.

Minister Rivers met with influential leaders in the US House of Representatives, Senate, State Department, and Treasury.

On 10 April, Minister Rivers met with Mr Brian Hook, the Senior Advisor to the Secretary of State and the head of policy planning for the State Department, who encouraged continuing cooperation between the Cayman Islands and US governments.

Minister Rivers thanked Mr Hook for the State Department’s update of the Cayman Islands section in its 2018 International Narcotics Control Strategy Report (INCSR), which reflect the legal changes made that enhance Cayman’s ability to fight money laundering and financial crimes. For instance, INCSR now reports that in Cayman, ‘shell banks and anonymous accounts are prohibited’, and that ‘prior to 2016, bearer shares were required to be immobilised’.

INCSR is an annual report to Congress. Global regulatory bodies regularly reference the INCSR in their own evaluations of countries’ progress in combatting financial crimes.

Other participants in the State Department meeting, who were heavily involved in the INCSR report, included Mr Robert Leventhal, Acting Director, International Narcotics and Law Enforcement Affairs, Office of Anticrime Programmes; and Mr Andrew Weinschenk, Director, Office of Threat Finance Countermeasures.

Also on 10 April, Minister Rivers and her team met Mr James Catto, Deputy Director, Western Hemisphere, who is the US Treasury Department’s lead coordinator on correspondent banking termination issues; and representatives with Treasury’s Office of Terrorism and Financial Intelligence.

As defined by the World Bank, de-risking refers to financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk.

This includes the restriction or termination of correspondent banking relationships (the provision of banking services by one bank to another), which has as one of its consequences the account closures of money transfer operators.

In discussing Cayman’s financial regulatory regime, Minister Rivers underscored that de-risking remains an important matter for Cayman.

‘Cayman’s status as a sophisticated international finance centre with international recognition as a well-regulated and cooperative jurisdiction should lead banks to classify it as a non-risky jurisdiction’, she said.

In meetings with leaders in Congress on 11 April, Minister Rivers highlighted Cayman’s leadership in enhancing its already sophisticated financial regulatory regime.

‘We focused on Cayman’s recent enhancements to our anti-money laundering regulations, and the stringent requirements related to identifying the beneficial owners of businesses and bank accounts’.

Minister Rivers spoke about these matters with Congressman William ‘Lacy’ Clay, a Democratic Member of the House of Representatives who is the Ranking Member of the House Subcommittee on Financial Institutions and Consumer Credit.

She and the team also met several US policymakers for anti-money laundering and bank supervision, including the senior staff for Mr Mike Crapo (Republican-Idaho), Chairman of the Senate Committee on Banking, House and Urban Affairs Chairman Mike Crapo; Mr Blaine Luetkemeyer, a Republican Member of the House of Representatives who is Chairman of the House Subcommittee on Financial Institutions and Consumer Credit; and Mr Alcee Hastings, Democratic Member of the House of Representatives who is a senior member of the Congressional Caucus on the Caribbean.

‘Several US leaders complimented Cayman on instituting financial regulatory reforms that meet, and at times, even exceed international standards’, said Minister Rivers.

Congressman Luetkemeyer’s and Congressman Clay’s advisors also expressed interest in further investigating the impact of correspondent bank de-risking on foreign jurisdictions and entities as part of their subcommittee oversight activities, complementing their current work focused on the detrimental impacts of banks who de-risked domestic businesses in the US under fear of criminal enforcement.

‘This visit to Washington, DC, provided a valuable opportunity to engage directly with the US government and financial services industry leaders’, said Minister Rivers. ‘We look forward to continuing our active engagement with the United States’.

Cayman’s delegation for the visit included Department of Financial Services Director Michelle Bahadur and Policy Officer Wilbur Welcome.

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Minister of Financial Services the Hon. Tara Rivers, JP, MLA; and Congressman William ‘Lacy’ Clay, a Democratic Member of the House of Representatives who is the Ranking Member of the House Subcommittee on Financial Institutions and Consumer Credit.

Minister of Financial Services the Hon. Tara Rivers, JP, MLA; and Brian Hook, the Senior Advisor to the Secretary of State and the head of policy planning for the State Department.