Financial Crime World

Gibraltar’s Financial Hub at Risk: Money Laundering and Terrorist Financing Threats Loom

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Gibraltar, a British Overseas Territory on Spain’s southern coast, is facing an increased risk of money laundering (ML) and terrorist financing (TF), according to a new report. The jurisdiction has been identified as a potential hotspot for criminal activity, with organized crime groups and foreign terrorist fighters using the territory as a transit point or haven.

Countries Linked to Money Laundering and Terrorist Financing

The report highlights several countries that have been linked to ML and TF activities, including:

  • Afghanistan
  • Iran
  • Iraq
  • North Korea
  • Pakistan
  • Somalia
  • Sudan
  • Syria
  • Yemen

Transactions and business relationships with these countries are particularly susceptible to ML risks, making it essential for financial institutions and businesses operating in Gibraltar to be vigilant.

EU and EEA Jurisdictions at Risk

The report also notes that certain EU and EAA jurisdictions may pose a risk of ML and TF, as some countries have been identified by the Financial Action Task Force (FATF) as having deficiencies in their anti-money laundering and combating the financing of terrorism (AML/CFT) systems.

Organized Crime Groups Using Gibraltar

The threat is not limited to foreign entities; organized crime groups operating in Spain are increasingly using Gibraltar as a placement location for their funds, or integrating and layering stages using Gibraltar-based businesses, products, or services. While there is no evidence that these groups are using Gibraltar for TF purposes, the risk of profits from illegal activities being used to finance terrorism cannot be ruled out.

Key Findings

The report highlights several key findings:

  • Jurisdictions identified as high-risk for ML and TF include countries in conflict zones, drug-producing and transit countries, and jurisdictions with a history of money laundering and terrorist financing.
  • EU and EAA jurisdictions may also pose a risk if they have not adequately implemented AML/CFT measures.
  • Organized crime groups operating in Spain are increasingly using Gibraltar as a placement location for their funds or integrating and layering stages using Gibraltar-based businesses, products, or services.

Mitigating the Risks

To mitigate these risks, the report recommends that financial institutions and businesses operating in Gibraltar:

  • Conduct thorough customer due diligence and monitoring
  • Implement robust AML/CFT systems
  • Report suspicious transactions to the relevant authorities
  • Collaborate with law enforcement agencies to share intelligence and best practices

International Cooperation and Information Sharing

The report also emphasizes the importance of international cooperation and information sharing to combat ML and TF. By working together, jurisdictions can help to disrupt criminal networks and prevent the misuse of financial systems for illegal activities.

Response from Gibraltar’s Financial Services Commission (FSC)

In response to these findings, Gibraltar’s FSC has announced plans to enhance its AML/CFT regulations and increase cooperation with law enforcement agencies to address these risks.