Gibraltar’s removal from the Financial Action Task Force [FATF] ‘grey list’ was announced on the 23rd February 2024. It is a first-class step forward and huge achievement that will greatly enhance the economy by facilitating international trade and financial transactions.
Gibraltar was found to have made “significant progress” in rectifying anti-money laundering [AML] and counter-terrorist financing [CTF] shortfalls that had been found in the past. It was found that it has successfully completed its action plan set by FATF.
FATF found that Gibraltar “… will no longer be subject the FATF’s increased monitoring process … after a successful on-site visit…”.
Spain continues to be out of step by labelling Gibraltar as a blacklisted jurisdiction from its perspective. That is in breach of its international commitment to delist us within two years of the tax treaty over Gibraltar becoming effective.
CONTINUED COOPERATION
Gibraltar will continue to cooperate with FATF regional body to strengthen AML, CTF, and counter proliferation financing [CPF] (generally involving manufacturing, dealing with, engaging in handling, or developing nuclear, chemical, or biological weapons systems).
It is a continued cooperation that is expected of all jurisdictions. The fight against crime is never-ending.
CONGRATULATIONS ALL ROUND
All who have been engaged in achieving Gibraltar’s removal from the FATF ‘grey list’ are to be congratulated. They include all who have had anything to do with that achievement in every field, be they Ministers or public servants, agents, regulators, and authorities.
Nigel Feetham, GSLP-Liberal Minister for Justice who is now charged with FATF related matters, recognised the collective effort saying, “We did it together… This achievement is a testament to the hard work and dedication of all our law enforcement agencies, regulators, and authorities.”
Chief Minister Fabian Picardo also acknowledged that widespread effort saying, “I am grateful to all the agencies and authorities that have contributed to this work as well as the private sector that has wholeheartedly joined us in our fight against economic crime.”
They both, also, very rightly, recognised the work done by past Ministers Albert Isola and Samantha Sacramento to achieve the ‘delisting’.
‘WHITELISTING’ BENEFITS
The Gibraltar Government has acknowledged that being ‘whitelisted’ is hugely significant. It is a development that reflects and acknowledges the unwavering commitment to meet international standards in combatting money laundering and terrorist financing.
It means that Gibraltar’s economy will no longer be significantly harmed by the jurisdiction being ‘grey listed’. It will greatly help future development.
It results in Gibraltar no longer being under “increased monitoring” by FATF. It is considered by FATF to be compliant with FATF’s worldwide standards on AML, CTF and CPF.
PRACTICAL ADVANTAGES
Consequently, ‘delisting’ favourably helps economic growth, facilitates cross-border transactions, and incentivises inward investment.
The downside of being ‘grey listed’ was that it was a disincentive to business relationships generally due to the added work needed and extra cost to overcome hurdles, and consequent delays caused. Those used to impact enterprises that were trying to trade and do financial transactions with Gibraltar whilst it was on the ‘grey list’. The hurdle is gone now.
Therefore, the economy will no longer be substantially damaged by, for example, suffering from reduced receipt of international payments, lower foreign direct investment, lower cross-border liabilities, and a decline in capital and direct investment inflows.
Mr Picardo said, “Gibraltar’s FATF ‘whitelisting’ not only enhances our reputation but also strengthens our position as a trusted and compliant international financial centre. This is excellent news for the jurisdiction.”
HIGH-LEVEL POLITICAL COMMITMENT
Nigel Feetham had publicly vowed that he would offer to resign as a Minister if FATF did not remove Gibraltar from the ‘grey list’. Following Gibraltar’s removal Nigel Feetham said that not only did he not have to offer his resignation but that he “… has given a high-level political commitment to continue the work we have been doing.”
Remaining off the ‘grey list’ is a continuous process of ensuring that standards are maintained and enhanced into the future. AML, CTF and CPF is an ongoing concern and countering it is a never-ending story. So, there can be no resting on laurels.
Nigel Feetham said, “We have not only focused on our delisting, but on the work that we have already started to plan for the next evaluation, in three years’ time, to ensure we remain fully in line with the FATF standards. We are 100% committed to fighting economic crime and playing our part with the international community in tackling money laundering and terrorist financing.”
SPAIN’S ‘BLACKLIST’
Gibraltar however wrongly and in breach of agreement remains on Spain’s blacklist of tax havens despite FATF’s clean bill of health. The FATF delisting has no direct impact on Gibraltar being removed from that list, although it must place Spain under added pressure.
Spain had promised to remove Gibraltar from its blacklist within two years of the tax treaty over Gibraltar having been entered with Spain. Spain has taken no action yet on that front. The tax treaty became effective in Spain on 4th March 2021 and in Gibraltar on 26th February 2021, which is more than two years ago.
On the 12th February 2023, in reaction to Spain having republished its blacklist of tax havens with Gibraltar still on it, the Gibraltar Social Democrats sought that the GSLP-Liberal Government indicate when it believed Spain might remove Gibraltar from its blacklist. There is no news on that front.
Although the issue is separate, the possibility exists that the matter wrongly remains pending the outcome of the wider Gibexit treaty negotiations currently in progress between the UK and the EU/Spain. The aim is to lead to agreement on Gibraltar’s post-Brexit relationship with the EU/Spain.
We wait to see how matters develop on this front with Spain. In the meantime, we can celebrate that the rest of the world sees us as we are, namely equal with the majority of the world by not being on the FATF ‘blacklist’ or its ‘grey list’.
Llanito World 