Sanctions Overview

Sanctions are restrictive measures imposed by the United Nations (UN) Security Council or the United Kingdom (UK) to achieve specific foreign policy or national security objectives, as well as maintain international peace and security. Sanctions may also be imposed by other countries or international bodies.

Sanctions can take many forms, including:

  • Financial sanctions such as asset freezes;

  • Trade sanctions such as arms embargoes or restrictions on specific goods, technology, or services;

  • Immigration sanctions such as travel bans.

Sanctions are developed in response to particular global events, threats to peace, or violations of international norms, such as terrorism, the proliferation of weapons of mass destruction, or human rights abuses.

The UN imposes financial sanctions through Resolutions adopted by the UN Security Council. As a British Overseas Territory, the Cayman Islands is required to implement UN and UK sanctions through Orders in Council extended to the Cayman Islands. These designations are implemented automatically in the UK and apply directly in the Cayman Islands.

Sanctions Overview

Sanctions are restrictive measures imposed by the United Nations (UN) Security Council or the United Kingdom (UK) to achieve specific foreign policy or national security objectives, as well as maintain international peace and security. Sanctions may also be imposed by other countries or international bodies.

Sanctions can take many forms, including:

  • Financial sanctions such as asset freezes;

  • Trade sanctions such as arms embargoes or restrictions on specific goods, technology, or services;

  • Immigration sanctions such as travel bans.

Sanctions are developed in response to particular global events, threats to peace, or violations of international norms, such as terrorism, the proliferation of weapons of mass destruction, or human rights abuses.

The UN imposes financial sanctions through Resolutions adopted by the UN Security Council. As a British Overseas Territory, the Cayman Islands is required to implement UN and UK sanctions through Orders in Council extended to the Cayman Islands. These designations are implemented automatically in the UK and apply directly in the Cayman Islands.

Why Are Financial Sanctions Used

Financial sanctions serve as a tool to:

  • Coerce regimes, entities, or individuals into changing their behaviour by increasing the economic and reputational costs of continuing specific activities;
  • Constrain the ability of targeted persons to access resources that could be used for terrorism financing, nuclear proliferation, or other illicit activities;
  • Signal disapproval, sending a strong political or diplomatic message and potentially isolating the target on the international stage;
  • Protect the value of misappropriated assets, enabling the recovery and repatriation of funds stolen from a country or its people.

Sanctions aim to promote accountability, uphold international law, and protect global stability and security.

Who Must Comply with Financial Sanctions?

All individuals and legal entities operating in, or undertaking activities within, the Cayman Islands are required to comply with UN and UK financial sanctions that are in force in the Cayman Islands. This includes:

  • Financial institutions;
  • Designated Non-Financial Businesses and Professions (DNFBPs); and
  • Other businesses or individuals engaged in relevant activities.

Non-compliance with sanctions obligations is a criminal offence. Anyone found in breach of relevant sanctions measures may be liable on conviction to:

  • Imprisonment for up to seven years;
  • A fine; or
  • Both.
Sanctions Overview

Sanctions Lists and Resources

The list of sanctions targets in force in the Cayman Islands is available here. It is the responsibility of all persons and entities in the Cayman Islands to ensure they are aware of and comply with applicable sanctions.

Firms are strongly encouraged to subscribe to the Financial Reporting Authority’s (FRA) Sanctions Notification Mailing List to receive timely updates:-

All Sanctions – Financial Reporting Authority

Guidance for Supervised Firms
Pursuant to Regulation 5 of the AMLRs, firms of attorneys-at-law engaging in or assisting other persons in the planning or execution of relevant financial business (RFB) or otherwise act for or on behalf of such persons in RFB are required to implement procedures to ensure compliance with financial sanctions obligations applicable in the Cayman Islands.

The FRA provides detailed guidance to assist firms in meeting their obligations. Please refer to the Guidance on Targeted Financial Sanctions

Your Responsibility
Compliance with sanctions is not optional or risk-based. Firms and individuals must:

  • Screen clients, transactions, and business relationships against applicable sanctions lists;
  • Report any sanctions matches or breaches to the FRA promptly;
  • Implement appropriate internal controls, including staff training and record-keeping, to ensure ongoing compliance.

Failure to comply may result in legal and regulatory consequences.

For further information or to report a sanctions-related concern, contact the FRA at financialsanctions@gov.ky.