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The Monetary Authority Amendment Law – Administrative Fines

13 December 2016

The Cayman Islands Government has enacted the Monetary Authority (Amendment) Law, 2016 (the "Law").  Although the Law will not be in force until a Cabinet Order is made to that effect, the Law gives the Cayman Islands Monetary Authority ("CIMA") the power to impose administrative fines for non-compliance on persons (entities and individuals) subject to Cayman Islands regulatory laws (including CIMA Rules) or the Money Laundering Regulations.  This will give CIMA equivalent powers to those which are customary for onshore regulators. 

Breaches are to be categorised as being "minor", "serious" or "very serious".  There will be a sliding scale of fines from CI$5,000 for minor breaches to CI$100,000 for individuals and CI$1 million for entities for very serious breaches.  Fines for ongoing minor breaches can be applied at intervals on a continuing basis up to a CI$20,000 cap. 

Fines may be imposed even if the relevant breach is not a criminal offence.  Though, where a breach is also an offence, the imposition of a fine will not preclude separate prosecution for that offence (or be limited by the penalty stipulated for that offence), and likewise any prosecution will not preclude the imposition of administrative fines or penalties. 

CIMA will have six months from becoming aware of a minor breach, or having received information from which the fact of the breach can be reasonably inferred, to impose a fine.  There is a two year time limit in respect of the imposition of fines for serious or very serious breaches. 

In respect of serious and very serious breaches, the Law contains the criteria CIMA may consider to make a decision whether or not to impose a fine, and of what amount. 

CIMA may issue further Rules and guidance about matters, including: (i) criteria for the application of its discretion; (ii) aggregating and mitigating factors; and (iii) the publication of fines.  Regulations may be made by the Cabinet providing for matters such as: (i) the procedure for imposing fines; (ii) appeals, payment and enforcement procedures; (iii) interest on outstanding fines; and (iv) evidentiary provisions.  

Importantly, fines shall not be imposed for breaches occurring before the commencement of these provisions of the Law. 

In addition to addressing the foregoing, the Law also adds the Development Bank Law (2004 Revision) and the Directors Registration and Licensing Law, 2014 to the list of regulatory laws.


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