Cayman Islands guide to Asset Tracing and Recovery 2024

The Cayman Islands guide to Asset Tracing and Recovery is a practical overview of asset recovery rules and procedures. Focusing on recent developments, it examines the primary processes and limitations for following and tracing fraudulently appropriated property, with due regard to the relevant legal rights and remedies, issues surrounding seizure and evidence rules.

The Cayman Islands guide to Asset Tracing and Recovery includes:

• Year in review
• Legal rights and remedies
• Defences to fraud claims
• Seizure and evidence
• Obtaining evidence
• Fraud in specific contexts
• International aspects
• Special considerations
• Outlook and conclusions

Click here to read the full Cayman Islands guide to Asset Tracing and Recovery.

Read below for the introduction to the guide.

The Cayman Islands is a major offshore financial centre. As of the first quarter of 2024, there were over 29,000 mutual funds and private funds registered in the Cayman Islands (the majority of which, save for maintaining a registered office within the jurisdiction as required by the Companies Act (2023 Revision) (the Companies Act)) conduct business elsewhere.¹

The jurisdiction is the number one domicile for hedge funds and the second-largest jurisdiction for captive insurance.² While the Cayman Islands financial services industry plays a significant role in the global economy (e.g., because of tax neutrality), it is unsurprising that Cayman Islands corporate structures have been used for nefarious purposes and have featured in some of the most notorious international fraud scandals such as the BLMIS (Bernie Madoff), AHAB v. Saad and the 1MDB fraud scandals.

The Cayman Islands’ judiciary and legal profession are well equipped and experienced in all matters concerning multi-jurisdictional fraud disputes. The Cayman Islands’ legal system is based on the English common law and statute. Therefore, case law from England and various Commonwealth jurisdictions is persuasive.

While the jurisdiction is often seen by outsiders as being shrouded in secrecy, the reality is that there is publicly available information that could be useful in facilitating the recovery of assets. This includes the identities of the directors of a company, land registry records, the aircraft registry and vessel transcripts for maritime vessels registered in the jurisdiction. Victims of wrongdoing will have recourse through the courts of the Cayman Islands (the Cayman Court)³ to assist with asset recovery efforts, including, but not limited to, freezing orders and disclosure orders. The Cayman Court has recently confirmed that there is a strong public interest in allowing victims of fraud to vindicate their rights and to deter the use of Cayman Islands corporate structures and professionals to facilitate the commission of fraud.⁴ The Cayman Court will also construe legislation and rules in a manner to avoid denying or impairing a litigant’s right of access to justice and to avoid conflicting with the ‘recognised public interest in protecting the reputation of the Cayman Islands as a well-regulated financial centre’.⁵

Click here to read the full Cayman Islands guide to Asset Tracing and Recovery.