Financial Crime World

Gibraltar’s Anti-Money Laundering Efforts Come Under Scrutiny

A recent report by MONEYVAL, the Council of Europe’s anti-money laundering body, has highlighted concerns about Gibraltar’s efforts to combat financial crime. The report calls on the authorities to take additional steps to identify, investigate, and prosecute money laundering cases, as well as confiscate proceeds of crime.

Shortcomings Identified

While MONEYVAL acknowledged some improvements in Gibraltar’s legal framework and inter-agency cooperation, it identified several shortcomings in the territory’s approach to anti-money laundering (AML) and counter-terrorism financing (CFT). The report noted that:

  • Gibraltar’s understanding of money laundering and CFT risks is limited by a lack of analysis of cross-border threats and insufficient use of financial intelligence.
  • The Financial Intelligence Unit (FIU) has not had a significant impact on developing investigations into money laundering cases.

Concerns about Prosecutions

The report also highlighted concerns about the lack of successful prosecutions or convictions for:

  • Third-party or stand-alone money laundering offenses, despite Gibraltar’s risk profile suggesting otherwise.
  • Terrorist financing, with no suspicious transactions reports related to this activity and questions raised about whether the absence of any such prosecutions is in line with Gibraltar’s risk profile.

Supervisory Authorities Criticized

The report criticized supervisory authorities for not applying licensing and screening measures effectively to prevent criminals from abusing financial institutions and non-financial businesses. Additionally, sanctions for non-compliance with AML and CFT requirements were considered:

  • Not proportionate or dissuasive

Conclusion and Recommendations

Despite some progress, the report concluded that Gibraltar needs to invest more efforts in identifying, investigating, and prosecuting money laundering cases, as well as confiscating proceeds of crime. MONEYVAL has invited Gibraltar to report back on its progress at its first plenary in 2021.

Key Takeaways

  • Gibraltar’s anti-money laundering and CFT efforts require significant improvement
  • The territory needs to enhance its understanding of money laundering and CFT risks
  • Supervisory authorities must apply licensing and screening measures more effectively
  • Sanctions for non-compliance with AML and CFT requirements need to be revised

Recommendations

  • Improve the analysis of cross-border threats and use financial intelligence more effectively
  • Enhance the Financial Intelligence Unit’s role in developing investigations into money laundering cases
  • Increase efforts to identify, investigate, and prosecute money laundering cases
  • Confiscate proceeds of crime
  • Review and revise sanctions for non-compliance with AML and CFT requirements