The Gibraltar Social Democrats have criticised the British overseas territory’s government after the Financial Action Task Force revealed that it would remain on the grey list.
The FATF noted that despite “continued progress across its action plan”, all deadlines to implement each point contained therein had now passed.
Gibraltar was placed on the grey list in June 2022, at the same time as Malta’s delisting was confirmed, when “strategic deficiencies” in AML compliance were said to have been identified.
At a press conference, Marcus Pleyer, FATF Chair at the time, stated that “there are a number of steps that need to be taken by the country” to ensure its removal.
In addition to underlining the importance of “Gibraltar focusing on gatekeepers to the financial system, including gambling operators and lawyers” he also cited a lack of sufficient financial punishments as being a key factor in failings in the region.
Gibraltar was subsequently made to implement an action plan to tighten its grip on money laundering and ensure an effective strategy would be in place in the region to combat the issue.
“…our financial services industry is suffering at the ignominy of being listed between Congo and Haiti as a high risk jurisdiction”Roy Clinton, GSD Shadow Minister for Financial Services and Gaming
Despite acknowledging that progress has been made “to strengthen the effectiveness of its AML/CFT regime,” the FATF has urged the region to maintain progress in the wake of the passed deadlines.
“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,” a statement read.
The impact of being included on FATF grey lists includes increased regulatory scrutiny and oversight from regulatory bodies and difficulty in accessing banking services. This can be due to hesitancy by financial institutions in conducting transactions with countries on such lists.
Responding to the update, the government noted that it is “ totally committed” to the ongoing process, with “all supervisory and other authorities” continuing to work with FATF to demonstrate compliance with its action plan.
“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,” an update noted.
However, speaking to local media, Roy Clinton, GSD Shadow Minister for Financial Services and Gaming, spoke of frustration and issued criticism at a lack of detail on how delisting will be achieved.
“It is regrettable that the opposition has abandoned their previous responsible approach for a misconceived political advantage”Albert Isola, Minister for Financial Services
“The Minister for Financial Services Hon Albert Isola MP continues to express optimism that Gibraltar will achieve delisting but he must accept that there is a growing sense of frustration at the failure to deliver on that optimism,” he is quoted as saying.
“Indeed, in June 2022 the government had stated it would show compliance ‘within the timescale given’, [but] that time has now expired.
“The minister will be aware that our financial services industry is suffering at the ignominy of being listed between Congo and Haiti as a high risk jurisdiction.”
Responding, the government had hailed past “maturity and responsibility” by the GSD in “their approach to this delicate matter”, but lambasted the opposition in having “succumbed to the temptation of politicising the crucial ongoing efforts to remove Gibraltar from the FATF grey list”.
Isola commented: “Roy Clinton’s statement smacks of political opportunism. While the opposition seeks to undermine our efforts, the government remains resolute in achieving delisting and restoring our jurisdiction’s reputation.
“It is regrettable that the opposition has abandoned their previous responsible approach for a misconceived political advantage. They really should know better.
“Notwithstanding the GSD opposition’s change in approach, I continue to extend an invitation to the opposition to meet them and brief them privately.
“I will never tire of thanking our regulators and law enforcement agencies for their professionalism in addressing the FATF requirements and have every confidence we will achieve delisting very soon.”