News that the European Commission officially removed the Cayman Islands from its anti-money laundering list has been met with cautious optimism by Norwegian pension fund KLP.
The NOK972.3bn (€86.2bn) Norwegian pension fund said it welcomed the fact more countries were now in line with anti-money laundering regulations.
“KLP have very limited exposure through the Cayman Islands, but on a general note, we are glad that more countries meet the requirements set by the EU regarding anti-money laundering regulations,” said Harald Koch-Hagen, KLP’s senior vice president of risk and asset allocation.
The comments come as the European Union officially removed the Cayman Islands from its list of high-risk third countries that have strategic deficiencies in their regimes on anti-money laundering and countering financing of terrorism as of 7 February 2024.
The Cayman Islands were added to the EU list of non-cooperative tax jurisdictions in February 2020, prompting several pension funds to tell IPE they planned to stay clear of the jurisdiction at the time.
However, none of the funds contacted by IPE – Denmark’s ATP, PFA, Sampension and Danica Pension, along with Sweden’s Alecta, Norway’s DNB Liv and Finland’s Varma and Ilmarinen – said explicitly they would divest holdings through Cayman-domiciled vehicles at the time.
Four years on, and the same Nordic funds were either unavailable or declined to comment on the latest development when contacted by IPE, bar KLP.
The Financial Action Task Force (FATF) first announced plans to remove the Cayman Islands and Jordan from the list late last year, according to an EU Delegated Act. In addition, Albania and Panama were removed from the FATF list.
The Commission said it had made the decision after it had reviewed progress in addressing the ‘strategic deficiencies’ of the Cayman Islands and Jordan.
“Following the measures implemented to address the action plans agreed with the FATF, the Cayman Islands and Jordan have remedied the strategic deficiencies in their respective anti-money laundering and combating the financing of terrorism regimes,” said the commission, adding that the countries no longer pose a significant threat to the international financial system.
