Gibraltar Removed from High-Risk List: Financial Controls Strengthened

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The European Commission has removed Gibraltar from its list of high-risk third countries with “strategic deficiencies” in their anti-money laundering and countering the financing of terrorism (AML/CFT) regimes. This significant move comes after Gibraltar worked diligently to strengthen its financial controls and address concerns raised by the Financial Action Task Force (FATF).

Background

Gibraltar had been on the EU’s high-risk list since 2017 due to deficiencies identified in its AML/CFT framework. The FATF also placed Gibraltar on its “grey list” of jurisdictions under increased monitoring. However, Gibraltar’s government remained committed to addressing these concerns and implemented significant reforms to strengthen its financial controls.

Reforms Implemented

To address the concerns raised by the FATF, Gibraltar implemented the following measures:

• Enhanced customer due diligence
• Improved risk assessment procedures
• Strengthened cooperation with law enforcement agencies

These efforts paid off as the FATF recognized Gibraltar as a compliant jurisdiction last month. The European Commission swiftly followed suit, removing Gibraltar from its high-risk list.

Impact

The removal of Gibraltar from the high-risk list is expected to:

• Boost investor confidence in Gibraltar as a reputable financial centre
• Ease bureaucratic burdens for financial transactions involving Gibraltar-based institutions

Government officials hailed the decision as “another validation of Gibraltar’s position as a reputable and trustworthy jurisdiction.” Counsel Lucy Keane, who qualified as a barrister in Gibraltar last year, praised the hard work put in by those involved in restoring Gibraltar’s reputation.

Gibraltar’s Unique Advantages

Gibraltar’s unique combination of:

• A continental location
• Low tax regime
• Financial passporting rights into the UK

make it an attractive destination for financial services companies. With its reputation now restored, Gibraltar is poised to regain its position as a major player in the global financial sector.

Conclusion

The removal of Gibraltar from the high-risk list comes at a crucial time for the territory, which faces stiff competition from other offshore financial centres. However, its unique advantages and strengthened financial controls make it an attractive destination for financial services companies. The news has sparked optimism among business leaders and investors, who are eager to take advantage of the opportunities presented by this small but strategically located territory.