European Commission removes Gibraltar from FATF ‘high-risk’ list
Gibraltar’s Path to Compliance: A Key Update on the FATF Status
In a significant development, Gibraltar narrowly avoided being removed from the grey list of high-risk jurisdictions in 2024, primarily due to opposition from certain Spanish Members of the European Parliament (MEPs). This decision is poised for another round of European Parliament approval.
On Tuesday, the European Commission announced that Gibraltar has been removed from the Financial Action Task Force (FATF) list of jurisdictions under increased monitoring. This marks a pivotal moment for Gibraltar, which has spent years addressing compliance issues related to anti-money laundering (AML) and countering the financing of terrorism (CFT) protocols.
The FATF list identifies jurisdictions with notable deficiencies in their national AML/CFT frameworks. Since 2022, Gibraltar, alongside Malta, has been categorized as a jurisdiction under increased monitoring. During this period, the Gibraltar government demonstrated its commitment to an FATF action plan delivered within the stipulated timeframes.
Recent evaluations by FATF highlighted two critical areas for improvement: regulatory sanctions and enforcing final confiscation judgments. In May 2024, Gibraltar was on the brink of being fully removed from the grey list after a Moneyval evaluation indicated “significant” progress in rectifying previously identified compliance deficiencies.
Despite successfully implementing all 40 FATF recommendations and receiving the Commission’s preliminary agreement for removal, the European Parliament denied this action in early 2024. Stakeholders have linked this to the influence of right-wing Spanish parliamentarians, reflecting the complex geopolitical dynamics surrounding Gibraltar’s status.
Only now have the FATF and the Commission deemed it prudent to officially remove Gibraltar from the grey list. “The updated list integrates the FATF’s assessments of jurisdictions under increased monitoring,” the Commission stated. “As a founding member of the FATF, the Commission plays a vital role in overseeing these jurisdictions, ensuring they fulfill their respective action plans.”
“Alignment with FATF standards is crucial to upholding the EU’s commitment to global compliance norms,” the Commission added, underscoring the importance of international cooperation in combatting financial crimes.
What Lies Ahead for Gibraltar?
Gibraltar’s future now hinges on obtaining the European Parliament’s endorsement of the updated list. Legal expert Selwyn Figueras, a partner at Hassans, expressed optimism on LinkedIn, highlighting that “the Commission’s intent is a sign of positive momentum amid external pressures.”
Nigel Feetham, Gibraltar’s Minister for Justice, Trade, and Industry, affirmed the importance of this decision: “We are thankful to the European Commission for its pivotal ruling today. While this is a crucial advancement, our journey is far from over. We will intensify our efforts.”
Global Trends: FATF’s Recent Updates
In addition to Gibraltar, the FATF also removed the United Arab Emirates and the Philippines from its grey list, among other countries—including Barbados, Jamaica, Panama, Senegal, and Uganda. However, new jurisdictions, such as Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela, were added to the high-risk list.
The Commission acknowledged the concerns surrounding the criteria used to compile the grey list. Following Gibraltar’s criticisms last year, the Commission undertook a comprehensive technical assessment guided by precise criteria and a well-defined methodology, incorporating insights gleaned from FATF evaluations, bilateral discussions, and on-site assessments.
As the global landscape evolves, maintaining robust AML/CFT frameworks will remain paramount for jurisdictions like Gibraltar. The ongoing commitment of governments to align with international standards will be critical in fostering trust and ensuring long-term sustainability in the gambling and financial sectors.
