Financial Crime World

Gibraltar Financial Services Commission Cracks Down on Real Estate Sector for Anti-Money Laundering Breaches

Enforcement Actions Against Real Estate Businesses

The Gibraltar Financial Services Commission (GFSC) has taken a significant number of enforcement actions against various businesses in the real estate sector for breaches related to Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF).

Key Observations

Frequency of Enforcement Actions

  • There have been 10 enforcement actions taken by the GFSC between May 2023 and April 2024, indicating a strong focus on AML/CTF compliance in the real estate sector.

Types of Breaches

  • The most common breaches identified include:
    • Failure to carry out adequate Customer Due Diligence (CDD): This is a critical aspect of AML compliance, and businesses found to be non-compliant have faced significant penalties.
    • Non-compliance with Targeted Financial Sanctions (TFS) obligations: Businesses must ensure they are up-to-date on TFS regulations and implement measures to prevent breaches.
    • Inadequate record keeping: Accurate and comprehensive records are essential for AML/CTF compliance, and businesses found to be non-compliant have faced financial sanctions.
    • Insufficient knowledge or training among Money Laundering Reporting Officers (MLROs): MLROs play a critical role in identifying and reporting suspicious activity, and businesses must ensure they receive adequate training.

Financial Sanctions

  • The financial sanctions imposed by the GFSC range from £1,000 to £12,500, highlighting the seriousness with which AML/CTF breaches are taken.

Temporary Ban on Managerial Positions

  • One business was subject to a temporary ban on managerial positions for 12 months, demonstrating the severity of penalties for repeat offenders or serious breaches.

Conclusion

The enforcement actions taken by the GFSC demonstrate the importance of maintaining robust AML/CTF controls in the real estate sector. Businesses must prioritize compliance and submit action plans to rectify identified deficiencies to avoid facing significant financial sanctions and reputational damage.