Cayman Islands Prepares for FATF Review with Legislative Overhaul

The Cayman Islands Government has introduced two new bills as part of a broader strategy to prepare for the Financial Action Task Force's (FATF) 5th Round Mutual Evaluation in 2027 and advance the country's virtual asset framework. The measures were announced on May 28 by the Ministry of Financial Services. 

The Churches Incorporation (Amendment) Bill, 2025, and the Virtual Asset (Service Providers) (Amendment) Bill, 2025, are intended to bolster the jurisdiction's anti–money laundering, counter-financing of terrorism, and counter-proliferation financing regimes while supporting market innovation and competitiveness. 

"These bills are only the first in a series of planned legislative enhancements," Premier and Minister for Financial Services André Ebanks said. "This government is taking focused, decisive action to safeguard Cayman's global standing and prepare rigorously for the 5th Round FATF assessment in 2027. At the same time, we are making commercial enhancements to sustain and attract innovation and investment in our financial services industry." 

The churches incorporation amendment addresses a long-standing compliance gap by requiring churches registered as nonprofit organizations to meet the same registration and governance standards set out in the Nonprofit Organization Act. The legislation also includes updated governance provisions intended to support good stewardship. According to the ministry, these changes follow extensive consultation with leaders of affected churches. 

The Virtual Asset (Service Providers) (Amendment) Bill clarifies how tokenized investment funds—traditional equity or investment interests recorded on a blockchain—fit within Cayman's regulatory regime. Mr. Ebanks said the changes provide necessary clarity for a growing segment of the financial sector and reflect the jurisdiction's ability to adapt to global FinTech trends. 

The ministry said further reforms will be introduced later this year to strengthen compliance and enhance Cayman's reputation as a leading international financial center.