Key Takeaways
- The Cayman Islands has appeared on EU and FATF lists in the past but later secured delisting after meeting its commitments.
- Different bodies assess jurisdictions differently, so the EU, FATF and OECD each apply their own criteria and produce separate ratings.
- Current standing across these lists shapes practical realities for non-resident owners, including banking access, due diligence and reputation.
- Re-listing risk remains worth monitoring, since a jurisdiction's status can change as standards and assessments evolve.
The Cayman Islands on Global Watchlists: What Listing Status Really Means
If you are weighing whether to incorporate a fund, holding company, or special purpose vehicle in the Cayman Islands, the grey list and black list question matters because it determines how banks and regulators outside the islands treat your entity. The short answer: the jurisdiction sits on none of the major non-cooperative lists, having exited the EU tax blacklist in October 2020 and the FATF grey list in October 2023.
Listing status is set by external bodies, chiefly the European Union and the Financial Action Task Force, and it changes how foreign financial institutions apply due diligence to your transactions. This article explains where the islands have sat across each list, why they were placed there, what fixed it, and what re-listing risk remains.
The material is written for the foreign owner, investor, or adviser deciding whether a Cayman structure will be treated as cooperative when capital crosses borders. The EU Council timeline records every addition and removal across the bloc's tax list.
The Bodies That List Jurisdictions: EU, FATF, OECD and Beyond
Several distinct frameworks judge a jurisdiction, and they measure different things. Confusing them is the most common error a foreign owner makes when reading headlines about offshore centres.
The EU list of non-cooperative jurisdictions for tax purposes runs on two annexes. Annex I is the blacklist of jurisdictions that failed to deliver on tax transparency, fair taxation, and BEPS commitments; Annex II, the "state of play" document, names those still working toward compliance but with sufficient undertakings given.
Established in December 2017, the EU list has been revised twice a year since 2020. A separate EU mechanism, the AML/CFT high-risk third countries list, tracks money-laundering risk rather than tax and follows FATF decisions.
The Financial Action Task Force maintains its own two tiers. Its blacklist, the "Call for Action," names countries judged non-cooperative against money laundering and terrorist financing; the grey list, formally "jurisdictions under increased monitoring," covers those with identified failings that have agreed an action plan.
A third layer comes from the OECD. The Global Forum on Transparency and Exchange of Information for Tax Purposes peer-reviews more than 170 jurisdictions on information exchange, while the Forum on Harmful Tax Practices examines preferential regimes and economic substance under BEPS Action 5.
| Body | List | What it measures |
|---|---|---|
| EU | Annex I (blacklist) | Tax transparency, fair taxation, BEPS |
| EU | Annex II (greylist) | Same, with reform commitments pending |
| EU | AML/CFT high-risk | Money laundering, follows FATF |
| FATF | Blacklist / grey list | AML, terrorist financing |
| OECD | Global Forum / FHTP | Information exchange, harmful regimes |
Domestically, the Cayman Islands Monetary Authority (CIMA) publishes FATF public statements and applies them to locally licensed entities through its public statements page.
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EU Annex I Blacklist: Cayman's 2020 Listing and 2020 Delisting
On 18 February 2020, the EU's ECOFIN committee moved the islands onto the Annex I blacklist. The reason was narrow: a perceived gap in economic-substance measures for collective investment vehicles.
The fix was already in motion. The Private Funds Law and the Mutual Funds (Amendment) Law had been enacted on 7 February 2020, introducing regulatory requirements for private funds that addressed the EU's concern over fund substance.
With those reforms adopted, removal followed quickly. The formal EU Council decision delisting the jurisdiction was taken on 6 October 2020, after fund-framework reforms in September 2020.
During the eight months of listing, the consequences for a foreign owner were real. Entities transacting with Cayman counterparties could face increased monitoring, special documentation demands, higher withholding taxes, and added DAC6 reporting on related-party transactions.
Removal from the EU master list did not clear every national blacklist. The Netherlands, for instance, kept its own list of low-tax jurisdictions that included the islands, last updated at end-2019.
As of October 2025, the EU Annex I blacklist contained 11 jurisdictions. The Cayman Islands is not among them.
EU Annex II Greylist: Past Inclusion and Current Standing
Before the 2020 blacklisting, the islands had sat on Annex II, having committed to address EU concerns, alongside the Bahamas, the British Virgin Islands, and others. Jurisdictions on this annex have not yet fully complied but have made enough reform commitments to avoid the blacklist.
Once the required fund legislation was enacted and Annex I removal came in October 2020, the jurisdiction did not slide back onto the greylist under the tax track. The outstanding issue was treated as resolved.
As of the February 2026 update, Annex II contained nine jurisdictions: Belize, the British Virgin Islands, Brunei Darussalam, Eswatini, Greenland, Jordan, Montenegro, Morocco, and Türkiye. The Cayman Islands does not appear. The next revision of the EU list is expected in October 2026.
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FATF Grey List: The 2021 Listing, Action Plan and 2024 Exit
At its February 2021 plenary, FATF placed the islands on the grey list of jurisdictions under increased monitoring for anti-money-laundering purposes. This was the most consequential listing for foreign owners, because it reached banking relationships worldwide rather than tax treatment alone.
The listing came despite strong underlying scores. A March 2019 Mutual Evaluation Report by the Caribbean FATF had assessed compliance with the 40 Recommendations, and by the time of grey-listing the jurisdiction had met 60 of 63 recommended actions and was rated compliant or largely compliant on 39 of 40 technical points.
FATF's reasoning rested on risk profile. As a major financial centre with higher inherent exposure, the islands were held to a higher effectiveness standard than the technical scores alone suggested.
The three-point action plan required the jurisdiction to:
- Apply effective, proportionate, and dissuasive sanctions, including administrative fines, for AML breaches.
- Impose adequate sanctions for inaccurate, inadequate, or outdated beneficial ownership filings.
- Demonstrate prosecution of all types of money laundering with dissuasive, effective outcomes.
Progress was rapid. By October 2021, FATF rated the jurisdiction compliant or largely compliant on all 40 technical recommendations, and on 23 June 2023 it announced the action plan fully satisfied, subject to an on-site visit.
That visit was completed in the week ending 1 September 2023. At the plenary closing on 27 October 2023, removal from the grey list was confirmed, alongside Albania, Jordan, and Panama.
The grey listing had a knock-on EU effect. Because of the FATF decision, the islands were added to the EU's separate AML/CFT high-risk third countries list on 13 March 2022.
Both followed the same path out. The UK removed the jurisdiction from its own high-risk AML list on 5 December 2023; the EU did so on 7 February 2024, through Commission Delegated Regulation (EU) 2024/163 published on 18 January 2024.
OECD Assessments: Tax Transparency and Harmful Tax Practices Ratings
OECD ratings tell a different and consistently positive story, which is worth separating from the AML headlines. The grey listing never touched tax transparency, an area where the islands score well.
The Global Forum's Second Round peer review in 2017 rated the jurisdiction "Largely Compliant" on Exchange of Information on Request. On automatic exchange, it was an early adopter, completed its first CRS exchange in 2017, and was assessed "on track" in November 2022, the highest possible rating, reconfirmed in the 2024 peer review update.
Country-by-Country Reporting is also in order. The 2024 CbCR peer review confirmed the jurisdiction meets all terms of reference, and it operates as a non-reciprocal CbCR jurisdiction that neither receives CbC reports nor applies local filing.
Under the Forum on Harmful Tax Practices, the islands are classified as a "no or only nominal tax" jurisdiction. All 11 such jurisdictions have been exchanging information under the relevant standard since 2021, and the domestic substance framework is rated not harmful.
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The Specific Deficiencies Cited and the Commitments Made to Fix Them
The two listings flagged unrelated problems, and the remedies differed accordingly.
The EU's 2020 tax concern was confined to economic substance for collective investment vehicles. The Private Funds Law and the Mutual Funds (Amendment) Law, both enacted 7 February 2020, closed that gap. Substance rules for fund management and holding companies had already applied since 1 January 2019, requiring core income-generating activity, direction and management, and adequate presence on the islands.
The FATF concern in 2021 was about AML effectiveness commensurate with the jurisdiction's size as a financial centre. Remediation went beyond paperwork.
- A dedicated bureau within the police service was established to lead complex cross-border money-laundering inquiries.
- Stricter rules and oversight were applied to higher-risk sectors such as real estate and precious-metals dealers.
- The Beneficial Ownership Transparency Act, enacted in late 2023, requires legal entities to record ultimate beneficial owners, with registers open only to those with a legitimate interest.
Following delisting, FATF rates the jurisdiction largely or wholly compliant with all 40 Recommendations, a level few EU member states or G20 members reach.
Where the Cayman Islands Stands Today Across Every List
For a foreign owner, the present picture is clean across every major framework.
| List | Status | Date / detail |
|---|---|---|
| EU Annex I (tax blacklist) | Not listed | 11 jurisdictions listed, Oct 2025 |
| EU Annex II (tax greylist) | Not listed | 9 jurisdictions listed, Feb 2026 |
| EU AML/CFT high-risk | Removed | 7 February 2024 |
| FATF grey list | Removed | 27 October 2023 |
| FATF blacklist | Never listed | n/a |
| UK AML high-risk | Removed | 5 December 2023 |
| OECD EOIR | Largely Compliant | Second Round, 2017 |
| OECD AEOI (CRS) | On track | Nov 2022, reconfirmed 2024 |
| OECD FHTP / BEPS Action 5 | Not harmful | Substance requirement met |
One caveat survives. Certain national lists, such as the Netherlands' domestic low-tax list, may still name the jurisdiction, because removal at EU level is not automatically mirrored by each member state.
Practical Consequences for a Non-Resident Owner: Banking, Due Diligence and Perception
When the islands sat on the AML lists, foreign institutions felt the effect directly. EU financial institutions had to run enhanced due diligence on Cayman-related relationships, gathering extra information on customers, beneficial owners, and source of funds and wealth.
Structural costs followed. Under Article 4 of the EU Securitisation Regulation, AML-listed countries could not host securitisation special purpose entities, which pushed US CLO structures away from the islands during the listing.
Member states could also apply defensive tax measures. France, for example, imposed withholding tax on interest, raised dividend rates, and denied interest deductions on payments to creditors in blacklisted jurisdictions.
Those burdens have lifted. With removal from the EU and UK AML risk lists, enhanced customer due diligence no longer applies to Cayman business relationships by virtue of list membership alone.
The practical result for moving capital is lighter documentation and restored confidence among US banks and institutional investors. Advisers should still check national lists, since a domestic listing can persist independently of the EU position.
Outlook: Monitoring Future Re-Listing Risk
Compliance is not a one-time achievement, and the assessment cycle continues. FATF's fifth round of mutual evaluations is set to begin in 2025, meaning the jurisdiction faces another intensive review of how its AML standards work in practice.
CIMA is expected to step up enforcement ahead of that review, with closer attention to virtual-asset risk, more inspections, and greater use of sanctions. A programme of CRS compliance reviews began in November 2024, testing governance, classification, reporting consistency, and data quality.
Tax-side standards are also rising. AEOI legislation is expected to be amended to incorporate the Crypto-Asset Reporting Framework and CRS 2.0, with CARF exchanges anticipated from 2027; the jurisdiction was among 48 that endorsed CARF implementation in November 2023.
Because EU lists are revised twice a year, with the next update due in October 2026, any deterioration in information-exchange ratings, substance ratings, or AML enforcement could in principle trigger re-listing. For owners of Cayman structures, continued compliance is therefore a commercial matter, not merely a regulatory one.
Conclusion
The Cayman Islands carries no current grey or black list status under the EU, FATF, OECD, or UK frameworks, having resolved the fund-substance issue in 2020 and the AML effectiveness concerns by October 2023. For a foreign owner, this means cross-border banking and due diligence no longer attract list-driven friction, though a few national lists may still name the jurisdiction. The standards that produced past listings remain in force, with a fifth-round FATF evaluation and CARF reporting on the horizon. Keeping a Cayman entity in good standing on beneficial ownership, substance, and reporting is the practical way to keep it off any future list.
How Expanship Can Help Your Business in the Cayman Islands
Expanship advises foreign owners on what listing status means for their structures and helps keep entities aligned with the beneficial ownership, economic substance, and reporting standards that determine whether a jurisdiction stays off the grey and black lists. That support sits within a wider set of services for foreign-owned entities operating in the islands.
- Company formation for funds, holding companies, and trading entities
- Registered agent and registered office services
- Tax registration, CRS and economic substance filings
- Ongoing compliance management and beneficial ownership maintenance
- Accounting and bookkeeping support
- Introductions to banking partners
To discuss your structure, contact Expanship Cayman Islands.
Frequently Asked Questions
No. The jurisdiction was removed from EU Annex I by Council decision on 6 October 2020, and as of October 2025 it does not appear among the 11 listed jurisdictions. The 2020 listing related only to fund economic-substance rules, which were corrected by legislation enacted that February.
No. FATF confirmed removal from the grey list at its plenary closing on 27 October 2023, after an on-site visit verified the action plan had been met. The jurisdiction has never appeared on the FATF blacklist.
FATF placed the islands under increased monitoring in February 2021 because, as a major financial centre, it was expected to demonstrate AML effectiveness matching its risk profile, particularly on sanctions, beneficial ownership accuracy, and money-laundering prosecutions. This was an effectiveness judgment, not a technical failure: it was already rated compliant or largely compliant on 39 of 40 recommendations at the time.
Yes, favourably. With removal from the EU and UK AML high-risk lists, EU and UK-regulated institutions no longer apply enhanced due diligence to Cayman relationships purely because of list status, which eases documentation when moving capital.
It is possible. A fifth-round FATF mutual evaluation begins in 2025, EU lists are reviewed twice a year, and any adverse finding on AML enforcement, information exchange, or substance could prompt re-listing, which is why ongoing compliance matters.
Yes. The OECD assesses tax transparency and harmful tax practices rather than money laundering, and the jurisdiction is rated "Largely Compliant" on information exchange, "on track" on automatic exchange, and "not harmful" on substance.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
