By Cayman News
Copyright caymannewsservice
(CNS): Lawyers conducting relevant financial business in Cayman’s offshore sector will be required to register with the Legal Services Supervisory Authority (LSSA), the new AML regulatory body created to “lead, strengthen and safeguard the legal services sector against money laundering, terrorist financing, proliferation financing, and related financial crimes”, according to a release from the Cayman Islands Legal Services Council.
LSSA was established following a number of legislative changes and falls under the Legal Services Council and Chief Justice Margaret Ramsay-Hale.
Local legal compliance expert Elisabeth Lees from Claritas, a law firm offering regulatory legal advice to Cayman entities and a specialist firm in this field, told CNS that lawyers conducting relevant financial work, such as managing client funds, are required, by international standards set by the Financial Action Task Force, to be supervised for the purposes of ensuring that the anti-money laundering, counter-terrorist financing, counter-proliferation financing and prevention of the evasion of sanctions frameworks are all in place and being properly utilized.
“This is to ensure that bad actors are detected and prevented and held accountable for breaches,” Lees said. “Lawyers conducting relevant financial business act as ‘gatekeepers’ at the time of onboarding clients and during ongoing monitoring and must comply with the Anti-Money Laundering Regulations (2025 Revision) in terms of conducting customer due diligence, conducting client risk assessments, conducting periodic reviews and ensuring that all AML, CTF, CPF and targeted financial sanctions evasion measures are complied with.”
She explained that these lawyers conducting relevant financial business were previously supervised by the Cayman Attorney Regulatory Authority (CARA), but amendments to the law last year stipulated that the regulator for this purpose would be the Cayman Islands Legal Services Council or its delegate, which is now the Legal Services Supervisory Authority.
In a circular across the sector, the chief justice has now confirmed the official establishment of the LSSA, and lawyers have been informed that the authority will be reaching out to firms and sole practitioners who were previously registered with CARA. Law firms and sole practitioners not previously registered with CARA can register with the LSSA directly.
“The LSSA then monitors compliance with the AMLRs and has a suite of enforcement powers as did CARA before it, including fines, available to it where breaches are detected,” Lees added.
The LSSA will maintain a register of all law firms and sole practitioners, and officials have stated it will adopt a risk-based approach to supervision, take steps to ensure AML compliance, and issue guidance, directives and procedures to help firms and sole practitioners to comply.
See the full release from the Legal Services Council below
