Gibraltar Lacks Effective Monitoring of AML Regulations

Despite being required by local law to comply with English Anti-Money Laundering (AML) regulations, Gibraltar’s lawyers have expressed concerns that there is no effective monitoring of compliance. This lack of monitoring has raised serious questions about the effectiveness of Gibraltar’s AML framework and its ability to prevent terrorist financing.

The Consequences of Ineffective Monitoring

• Charities and financial institutions in Gibraltar may not be adhering to AML requirements, leaving the territory vulnerable to money laundering and terror funding.
• The absence of effective monitoring means that charities may not be complying with annual audited account filing requirements, raising concerns about potential clandestine diversion of funds and terrorist financing.

Issues with Gibraltar’s Charities Ordinance

• Critics argue that the blanket exception granted to religious charities under Section 6(4) of the ordinance should be reviewed.
• The ordinance requires all charities to file annual audited accounts with the Supreme Court registry, which are reviewed by the Board. However, the lack of effective monitoring means that these requirements may not be being met.

International Cooperation Deficiencies

• Gibraltar has not extended the Vienna Convention or the International Convention for the Suppression of the Financing of Terrorism (ICSFT) to its territory.
• The Financial Services Commission has been criticized for failing to share information with other international competent authorities, despite being a member of the Egmont Group. This lack of cooperation makes it difficult to track and prevent money laundering and terror financing activities.

Economic Concerns

• Gibraltar’s economy is dominated by three sectors: tourism, ports and shipping, and financial services.
• However, the territory’s lack of effective AML monitoring and cooperation with international efforts raises serious concerns about its ability to prevent terrorist financing and maintain financial stability.

Conclusion

The situation in Gibraltar highlights the need for the territory to strengthen its AML framework and cooperate more effectively with international authorities to prevent money laundering and terror financing. Failure to do so could have serious consequences for Gibraltar’s financial reputation and national security.