GSD Calls For Explanation Following UK Money Laundering Regulations Amendment
The GSD says it is disappointed by the recent amendment to the UK’s Money Laundering regulations and the classification of Gibraltar as a “high-risk third country for the purposes of enhanced customer due diligence requirements”.
A statement from the GSD follows below:
The UK has amended its Money Laundering regulations and “classed [Gibraltar] as a high-risk third country for the purposes of enhanced customer due diligence requirements” with effect from 17 July 2022.1 This is not only disappointing but requires explanation from the Government given the statements made by the Minister for Financial Services, Mr Isola, in Parliament on 29 June 2022 after the FATF grey-listed Gibraltar.
Then, the Minister said that “The FATF does not call for the application of enhanced due diligence measures to be applied to jurisdictions under increased monitoring, but encourages its members and all jurisdictions to take into account the information presented below in their risk analysis. Some countries will require enhanced due diligence measures as regards Gibraltar but we would expect these to be proportionate to the brevity of the Action Plan. Needless to say, HM GOG has been in very close contact with HM Treasury for a significant period of time on the subject of Gibraltar’s review and they have been and continue to be extremely supportive.”
Given that the Government had said that the FATF did not require the application of enhanced due diligence by other countries as a response to the grey-listing and that the UK were being “extremely supportive” there should be an explanation as to why three weeks after that statement the UK has amended its regulations to put Gibraltar on the high-risk list and precisely subject it to enhanced customer due diligence. In fact, this decision had been flagged in an HM Treasury update on 4 July 2022 which made the UK’s intention clear. When did the Government become aware of that decision and what representations has it made before the publication of the new UK legislation or after it? How is that UK measure “proportionate to the brevity of the Action Plan” or consistent with the fact that we were told by the Government that the UK was apparently “extremely supportive.”
This latest development jars with the impression given by the Government in Parliament and will be disappointing and of concern to the financial services industry. It emphasises the importance of dealing with this whole issue decisively so that we are off the FATF grey list at the earliest opportunity.
https://www.legislation.gov.uk/uksi/2022/782/contents/made
https://www.legislation.gov.uk/uksi/2022/782/note/made
1 See the explanatory memorandum to the Money Laundering and Terrorist Financing (High Risk Countries) (Amendment) (No.2) Regulations 2022 via the embedded link.
Extract of Budget Speech – Minister for Financial Services 29 June 2022
“On 17th June 2022, the Financial Action Task Force (FATF) identified Gibraltar as a jurisdiction under increased monitoring in respect of only two Recommended Actions; relating to the pursuit of regulatory sanctions and the pursuit of final confiscation judgements. A colossal amount of work by all the supervisory authorities and others went into achieving the reduction to just two Recommended Actions in the FATF Action Plan.
HM Government of Gibraltar was naturally disappointed at the outcome but fully accepts this Action Plan as identified by the FATF and is committed, at the highest political level, to show full compliance within the timescale given. Gibraltar’s Action Plan is the shortest of any country or jurisdiction that has been identified as under the increased monitoring process; informally known as “grey listing”.
The FATF does not call for the application of enhanced due diligence measures to be applied to jurisdictions under increased monitoring, but encourages its members and all jurisdictions to take into account the information presented below in their risk analysis. Some countries will require enhanced due diligence measures as regards Gibraltar but we would expect these to be proportionate to the brevity of the Action Plan.
Needless to say, HM GOG has been in very close contact with HM Treasury for a significant period of time on the subject of Gibraltar’s review and they have been and continue to be extremely supportive. Likewise, HM GOG has been liaising closely with all relevant sectors in Gibraltar.
HM Government of Gibraltar continues to work in partnership with the FATF and is proud of the relationship that it has with this international standard setting body. Lastly, we look forward to being removed from the list of countries under increased monitoring in as short a timeframe as possible.”
https://www.gibraltar.gov.gi/press-releases/budget-speech-2022-the-hon-albert-isola-mp-4572022-8056
