Gibraltar FATF

Many people assume we are a colony but to us it is clear we are not given the work several Gibraltar Governments and the UK have done to give us our independence. We continue to strive and create a partnership with the UK (given) and the EU including our closest neighbour. As you can see from this excellent piece written by the editor of the Gibraltar Chronicle there is still work to be done though sometimes ticking every box we would still fall short.

The Financial Action Task Force, the global money laundering and terrorist financing watchdog, kept Gibraltar on its ‘grey list’ of high-risk jurisdictions on Friday, despite acknowledging the Rock’s “good progress” in tackling deficiencies identified by inspectors. Gibraltar was placed on the FATF list in June 2022 even after complying with all but two of the 78 recommendations made in a MONEYVAL mutual evaluation report. It agreed an action plan to address the outstanding points by May this year but on Friday, the FATF said there was still work to do.

“Since June 2022, when Gibraltar made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Gibraltar has taken steps to do so, including by demonstrating that the supervisors for trust and company service providers, lawyers, gaming businesses, real estate agents, and other nonbank entities are now using a range of effective, proportionate, and dissuasive sanctions for AML/CFT breaches, specifically by taking more enforcement actions, imposing financial penalties, and publishing the results of cases, where appropriate,” the FATF said in its latest update on Gibraltar.

“Gibraltar should continue to work on implementing its action plan to address its strategic deficiencies, including by showing that it is able to pursue more final confiscation judgments commensurate with the risk and context of Gibraltar.”

“The FATF notes Gibraltar continued progress across its action plan; however, all deadlines have now expired.”

“The FATF encourages Gibraltar to continue to implement its action plan to address the above-mentioned strategic deficiencies as soon as possible.”

The decision will be a disappointment to both the Gibraltar Government, regulatory supervisors and industry, which had worked in partnership to address the FATF’s concerns.

Reacting to the announcement, the Gibraltar Government said only that it remained committed to the process.

“Noting that only one substantive action point remains pending, the Government continues to work tirelessly to meet its action plan at the very earliest opportunity,” No.6 Convent Place said in a statement.

“The Government is totally committed to this process and all supervisory and other authorities continue to work with FATF to demonstrate our compliance with our action plan.”

Albert Isola, the Minister for Financial Services, told the Chronicle: “Our commitment to this process and to be removed from the grey list is 100% and we are on course to progress.”

“The Government and our stakeholders have done everything required of us.”

The remaining action point relates to obtaining court judgments and confiscation orders arising from money laundering investigations, but these are in large part independent judicial processes that can take time.

At a press conference on Friday, FATF President T. Raja Kumar was asked whether the FATF had taken this into account when assessing Gibraltar, particularly given the progress acknowledged by the organization in all other areas.

Mr Raja Kumar did not address the question directly, opting only to underscore the conclusion outlined in the official update.

“Gibraltar has made good progress in some areas, but the key deficiency that remains is needing to demonstrate progress in relation to confiscation,” he said.

“And this has to be in line with the risks and context of that particular jurisdiction.”

“Gibraltar has a good sense of what the gaps are and the need to essentially take action to address those gaps.”

“There’s a fair amount of progress that Gibraltar has already made.”

“I urge it to basically continue on its path to fully implementing the requirements that FATF has imposed.”

“Gibraltar also knows that there are examples from other countries that serve to illustrate the ways forward.”

“So these are all things that Gibraltar can actually do.”

“So once again, I reiterate that Gibraltar has made good progress, but still there is a fundamental action item that needs to be fully addressed and I urge Gibraltar to continue to press forward on this particular gap.”

On Friday, the Gibraltar Government underscored its gratitude to all the regulatory bodies involved in the pursuance of its action plan, including the Royal Gibraltar Police, HM Customs, the Financial Services Commission, the Gambling Division, the Gibraltar Financial Intelligence Unit, the Office of Criminal Prosecutions & Litigation, the Office of Fair Trading, its National Coordinator and the Legal Services Regulatory Authority.

Credit: The Gibraltar Chronicle