Gibraltar Removed from High-Risk List After Strengthening Financial Controls
In a significant development, Gibraltar has been removed from the European Commission’s list of high-risk third countries with “strategic deficiencies” in their anti-money laundering and countering the financing of terrorism (AML/CFT) regimes.
Background
Gibraltar was added to the EU’s high-risk list in December 2017 due to concerns regarding its AML/CFT framework. However, the British Overseas Territory had been working hard to restore its reputation and address FATF’s concerns through implementing enhanced customer due diligence, improving risk assessment procedures, and strengthening cooperation with law enforcement agencies.
Efforts to Strengthen Financial Controls
Following these reforms, Gibraltar actively engaged with the FATF and addressed all outstanding issues. This led to the authority recognizing it as a compliant jurisdiction, which prompted the European Commission to remove it from its high-risk list.
Key Reforms Implemented
- Enhanced customer due diligence
- Improved risk assessment procedures
- Strengthened cooperation with law enforcement agencies
Impact on Gibraltar’s Financial Sector
The removal of Gibraltar from the high-risk list is likely to have significant implications for the territory’s financial sector, with many expecting a boost in investment and economic activity. As one source put it: “A real sense of optimism and energy is back on the Rock and the future looks rosy.”
Quotes
- “This is another validation of Gibraltar’s position as a reputable and trustworthy jurisdiction.” - Gibraltar government spokesperson
- “Gibraltar has a very vibrant and competitive financial services sector covering insurance, trusts, crypto, and funds. With its continental location and low tax regime, this makes Gibraltar a very attractive destination for financial services companies.” - Lucy Keane, counsel with Signature Litigation
Conclusion
The removal of Gibraltar from the high-risk list is a significant boost to its reputation as a global financial centre. The territory’s efforts to strengthen its financial controls and address concerns raised by the FATF have paid off, leading to increased investor confidence and ease in bureaucratic burdens for financial transactions involving Gibraltar-based institutions.