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Prominent Cayman bank Cainvest receives €100k fine for breaches of due diligence

Cainevest Bank Cayman Islands

By Dan Byrne for AMLi

ONE OF THE BIGGEST banks in the Cayman Islands has been fined for failing to comply with AML standards.

Cainvest Bank and Trust Limited was handed down a penalty of $100,000 by the Cayman Islands Monetary Authority (CIMA) – the financial watchdog for the tiny British Overseas Territory.

The bank had repeatedly failed to apply sufficient due diligence processes for customers, the Authority said in a statement. They had also failed in their requirement to analyse beneficial owners or transactions in certain cases.

“This case highlights the importance of licensees having in place effective AML/CFT/PF policies and procedures.” CIMA said.

Cainvest Bank began by providing private banking to higher net worth individuals and institutional clients. It currently claims to represent just over two fifths of all banks in the Cayman Islands market.

In a statement, the bank maintained that the fines were in relation to business that the firm was no longer involved in – particularly that of private banking.

It also threw its support behind current compliance staff, maintaining that they had only joined the bank after the relevant breaches had been discovered.  

All staff who were responsible for the compliance failures relevant to the fine had since left the organisation, the bank said.

“Our current compliance officer Mrs Elaine Humphreys… has been working assiduously to ensure that the bank is compliant with all relevant Cayman Islands Regulations,” their statement read.

While ranked as one of the most important financial centres in the world, the Cayman Islands frequently receives criticism for its vulnerability to financial crime, and the historically lax regulations which have allowed it.

The territory has made efforts in recent times to clean up its global financial image – most recently by introducing much tighter laws around virtual asset services, aiming to eliminate the chances of cryptocurrency trades being used for financial crime. 

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