Cayman: don’t make us laugh

Posted on

I am amused by a story published today by that says:

Suspicious financial activity reports presented to the Cayman Islands’ finance industry watchdog group have increased steadily over the past four years, according to the Financial Reporting Authority.

Attorney General Sam Bulgin sees it as a positive sign for the country.

“It is an indication that [financial] entities are taking their reporting requirements seriously,” Mr. Bulgin told the Legislative Assembly last week. [It shows] this jurisdiction will be hostile to those who wish to use it‚Ķfor money laundering and terrorist financing.”

The Financial Reporting Authority — an independent six person agency — has revealed that the number of suspicious financial activity reports in Cayman increased from 219 in government’s 2006/07 budget year to 358 in the fiscal year that ended as of 30 June.

It then adds:

However, that doesn’t mean more suspicious financial activity is actually occurring.

In the 2009/10 budget year, the authority decided that 187 of the 358 cases it was sent required no immediate action. Forty-one of the 358 reports were still being investigated by the fiscal year end.

That’s all right then.

Except for one thing. Cayman is the fifth biggest financial centre in the world, and one where secrecy is paramount — with massive legal penalties to enforce it. London is a bigger financial centre, admittedly. And secrcy is still important. But there’s some indication of a difference in culture: Cayman had 358 SARs. We had 228,834 in the year to September 2009.

Spot the difference?

And Cayman says it is well regulated. I’m sorry, but please don’t make us laugh: if the transactions requiring regulation aren’t disclosed that just can’t be true.