GIB FINANCE CENTRE COMPLIES WITH ALL INTERNATIONAL ANTI-CRIME MEASURES
GIBRALTAR CHRONICLE , Monday, 18th July 2011
“We are as well regulated as New York, London or Frankfurt”
by F Oliva
Gibraltar’s finance centre is “transparent, open to cooperation” with other countries, and compliant with international financial regulations such as EU anti-money laundering directives and tax exchange information agreements.
Speaking at a high-powered seminar of judges, magistrates and judicial officials in the Universidad Internacional de Andalucia in Huelva, Minister for Justice Daniel Feetham also rejected allegations that the Rock’s finance activities were shrouded in secrecy.
“We are not geographically or technically an offshore centre, or even a ‘fiscal paradise’ but a fully onshore, compliant and well regulated jurisdiction,” he declared.
Mr Feetham, who was invited to attend by Algeciras judge Manuel Gutierrez Luna, stated that Gibraltar is subject to the 3rd Anti-Money Laundering Directive just like all other EU member states, and to any other current or future stipulation which includes tracking down all crimes, including the proceeds of drug trafficking and the financing of terrorist activities.
Gibraltar also complies with other European cooperation initiatives against crime such as the Mutual Assistance Directive, Market Abuse Directive, Tax Savings Directive and other Schengen provisions.
Mr Feetham said he was proud of Gibraltar’s notable achievements in the field of international banking and insurance supervision, noting an International Monetary Fund review in 2007 which found the Rock’s banking sector “totally compatible with 27 of the 30 applicable international norms, and largely compatible with the remaining three.”
In the insurance sector, the IMF review found Gibraltar fully compliant with 24 out of 28 international norms and largely compliant with the remaining three.
“These are among the highest standards of supervision attained by any country in an IMF review, and we are keen to maintain the finance centre at the vanguard of international regulation and supervision” said the Minister.
Gibraltar also complies with the vast majority of the 40+9 special recommendations by the Financial Action Task Force, something which has been independently verified twice by the IMF. Mr Feetham also noted that the 2007 inspection found Gibraltar as “not complying or only partially complying” with just six of the 16 core FATF recommendations.
“This places us ahead of many large countries in terms of the efficiency of our laws and anti-money laundering detection mechanisms.”
The IMF review and an independent assessment of the activities of the Rock’s Financial Services Commission concluded that “supervision is generally effective and exhaustive” and that Gibraltar is “a competent supervisor,” said the Minister.
Mr Feetham said that Gibraltar’s new tax system is non-discriminatory which allows it to be a competitive and attractive business location, has budget surpluses and a net debt below 22% of GDP. He said that the Rock was not a fiscal paradise even though it was a low tax jurisdiction.
As regards cross-border cooperation, Mr Feetham recalled last year’s Fletcher financial impact report which attributed 12.2% of the Campo’s total GDP to its economic interaction with Gibraltar.
“Gibraltar imported £174m in goods and services from Spain, Spanish workers in Gibraltar spent £27m of their local earnings in Spain, while frontier workers spent a further £36m. Gibraltarians spent £30m in Spain while Gibraltarians with a second home in Spain spent £30m. Spanish visitors to Gibraltar spent £134m.
“This represents a direct effect by the economy of Gibraltar on that of the Campo of £167,9 m.”
Mr Feetham also noted that Gibraltar is not a large market for drugs consumption and described the local problem as “minor and limited to personal use.” He said there were stiff prison sentences for drug possession offences and that there was a “zero tolerance regime” toward drugs, which exercised an efficient deterrent effect on drug traffickers.
The Minister explained that the Rock’s geographical location beside a major cannabis producer and exporter such as Morocco and at the doorstep of Spain which is the main entry point of cocaine into Europe, could tempt organized crime groups operating in these countries to use corporate vehicles in Gibraltar for their criminal money laundering activities.
However, the level of regulation and supervision that exists is such that “there is no systemic risk of the Rock being used for this.”
“All the providers of financial services in Gibraltar are obliged by law to apply the same control systems, with high standards of anti-money laundering safeguards regardless of their size or activity, under the close control and supervision of the local Financial Services Commission.”
Mr Feetham further commented that the regime under which the FSC operates its anti money-laundering policy is more robust than in UK in certain areas.