|1. General||No text required|
|2. Legal System and Related Institutional Measures|
|Criminalization of Money Laundering (R. 1, 2 & 32)|
Consolidate the ML offences laid out in the DTOO and the CJO into one consolidated ordinance to avoid two-track approach to the ML offence, as indicated by the Chief Minister.
Criminalize migrant smuggling as an indictable offence so that it may be considered a predicate offence for money laundering
Consider criminalizing the export of cigarettes as an indictable offence (rather than a summary conviction only offence) in order that it becomes a predicate crime for money laundering as part of the required category of offences for “illicit trafficking in stolen and other goods.”
Consider charging domestic persons in the financial industry with money laundering when a mutual legal assistance request reveals complicity in money laundering by Gibraltar residents.
Hold seminars for the bench and bar on money laundering prosecutions.
Maintain statistics on the number of charges laid, the number of prosecutions brought and the number of convictions for money laundering offences.
|Criminalization of Terrorist Financing (SR.II & R.32)|
|Confiscation, freezing and seizing of proceeds of crime (R.3 & 32)|
Consolidate the asset forfeiture provisions of the CJO and DTOO, and in doing so take advantage of the best features of each. Thus, reversal of burden of proof provisions should be extended beyond drug-related confiscation to all crimes, and cash seized at the border should be allowed to be detained on a suspicion that it is proceeds of or intended to be used in any crime, not just drug trafficking.
Enact the proposed legislation extending to all states that are parties to the UNTOC the ability to enforce external confiscation orders.
Clarify the authority of the GFIU to issue “nonconsent” letters and provide guidelines for their use.
Maintain consolidated asset confiscation and forfeiture statistics.
|Freezing of funds used for terrorist financing (SR.III & R.32)|
Procedures for delisting requests and the unfreezing of funds should be developed and published.
The FSC should issue guidance to the financial services community concerning affirmative obligations to freeze assets of persons listed by the UNSCR 1267 Committee and the EU. These affirmative obligations should include incorporating the information into their AML/CFT compliance programs, and reporting to authorities on any transactions that may be connected to terrorist financing.
|The Financial Intelligence Unit and its functions (R.26, 30 & 32)|
Provide clearer public explanations of the roles and responsibilities of the GFIU vis-à-vis the GCID and the police particularly with respect to TF.
Clarify the implications, if any, on the GFIU of legal requirements that suspicious transactions related to terrorism be reported variously to the Governor and the police.
Amend Sections 33(2) and (3) of the GO to require holders of gambling licenses to report disclosures of suspected money laundering to the GFIU instead of the gambling commissioner.
Analyze possible relationships between observed trends in disclosures and other criminal intelligence.
Consider providing the FSC, the GRA and any other authority having AML/CFT oversight responsibility with numerical only statistical data on the reporting performance of specific individual businesses. This would assist those authorities in their supervisory programs.
GFIU should give priority to establishing contact with the sectors not regulated by the FSC to: provide clear education and guidance as to reporting obligations and procedures for making disclosures to the GFIU and to foster sharing of information on potential ML/TF risks in these sectors.
Document internal procedures for all GFIU functions.
Consider ways to clarify the circumstances and extent to which the GFIU can and will obtain access to further information from reporting businesses.
|Law enforcement, prosecution and other competent authorities (R.27, 28, 30 & 32)|
Update production order and warrant statutes to make them more effective in nondrug related financial investigations. Specify types of documents that may be made available, include provisions protecting information retained on computers, and authority for police and customs to enter premises to execute production orders. Use Schedule 10 of the Companies Ordinance as a model.
Clarify and document the roles and responsibilities of the GFIU within the GCID vis-à-vis the private sector.
|3. Preventive Measures-Financial Institutions|
|Risk of money laundering or terrorist financing|
|Customer due diligence, including enhanced or reduced measures (R.5– 8)|
Prohibit anonymous and fictitious accounts in law or regulation;
Address, in law or regulation, the need to undertake customer due diligence when: carrying out occasional transactions that are wire transfers; there is a suspicion of money laundering or terrorist financing; and the financial institution has doubts about the veracity or adequacy of previously obtained customer identification data;
Require through law or regulation that the financial institution determine the natural person who ultimately owns or controls the customer, when the customer is a legal person or arrangement;
Address, in law or regulation, the requirement for financial institutions to conduct ongoing due diligence on its business relationships;
Determine if institutions, having refused business because full “know your customer” information was not provided, have provided STR reports to the GFIU;
Ensure that bureaux de change, the Gibraltar Savings Bank, and money transmitters are subject to and implementing PEP requirements;
Review existing correspondent banking arrangements to ensure that the institution has gathered sufficient information on the reputation and supervisory arrangements for the respondent;
Ensure that bureaux de change, the Gibraltar Savings Bank, and money transmitters are looking at the risks associated with new technologies;
Ensure effective implementation of the new language in the AMLGNs requiring that institutions carefully consider the risks associated with new technologies; and
Generally review the AMLGNs for language and tone that may read as permissive or informational in places.
|Third parties and introduced business (R.9)|
Require financial institutions relying on intermediaries to immediately obtain from that intermediary information on the identity of the customer, and beneficial owner of the account and the legal status of legal persons or arrangements. Beneficial ownership requirements should be included in law or regulation;
Require that financial institutions have access, without delay, to the identification or other relevant documentation housed with the intermediaries;
Require that institutions have processes to assess whether or not an institution within the EU may be accepted as an intermediary;
Determine to what extent the industry has been allowing intermediaries under the fourth scenario of the AMLGNs (paragraph 4–85) and ensure that all institutions are now obtaining the appropriate due diligence information; and
Ensure that the ultimate responsibility for customer identification and verification remains with the financial institution relying on the third party.
|Financial institution secrecy or confidentiality (R.4)|
|Record keeping and wire transfer rules (R. 10 & SR. VII)|
Address the confusion related to Section 17(2) of the CJO, ideally through repeal of the passage;
Address, in law or regulation, that business correspondence must also be retained (in addition to the requirements for identification and transaction records);
Address, in law or regulation, the requirement that institutions maintain their records in a way that they are able to provide information to the appropriate authorities on a timely basis when appropriately authorized to do so; and
Verify that bureaux de change and the stand-alone money transmitter are effectively implementing the record keeping requirements.
|Monitoring of transactions and relationships (R. 11 & 21)|
Ensure that bureaux de change and the stand-alone money transmitter are applying risk-based procedures for relationships and transactions coming from persons outside of Gibraltar, who may not be subject to equivalent AML/CFT requirements; and
Extend the discussion on equivalency to include considerations related to TF.
|Suspicious transaction reports and other reporting (R.13, 14, 19, 25 & SR.IV)|
Clarify the reporting obligations for the suspicious transaction reports related to money laundering (GFIU vs. GCID vs. “customs and police”);
Clarify, through law or regulation, where reporting entities should file suspicious transaction reports related to TF in Gibraltar; and
Ensure that there are requirements in place to report suspicions on attempted transactions.
|Cross Border Declaration or disclosure (SR IX)|
Amend laws to require disclosure of cross-border movements of currency and bearer negotiable instruments. Such a system could apply only above a certain threshold.
Amend laws to enable customs and police officers to detain currency and negotiable instruments that are falsely disclosed or that are suspected of being related to terrorist financing or money laundering; and
Amend laws to enable authorities to confiscate such seized currency and negotiable instruments under appropriate circumstances consistent with Special Recommendation IX.
|Internal controls, compliance, audit and foreign branches (R. 15 & 22)|
Extend AMLGNs to include TF in the areas of controls and training;
Ensure that financial institutions have an internal audit or other mechanism to check compliance with the AMLGNs in place, including bureaux de change and the stand-alone money transmitter; and
Extend the standards for hiring to insurance firms, bureaux de change, and money transmitters.
|Shell banks (R.1 8)|
|The supervisory and oversight system– competent authorities and SROs Role, functions, duties and powers (including sanctions) (R.23, 30, 29, 17, 25 & 32)|
Address the lack of “effective, proportionate, and dissuasive” sanction regime for both bureaux de change and nonbank money transmitters in the area of AML/CFT;
Address the lack of effective oversight for bureaux de change;
Ensure that all financial institutions are subject to requirements that prohibit criminals or their associates from holding or being the beneficial owner of a significant or controlling interest or holding a management function in a financial institution;
Extend the AMLGNs to focus not only on ML, but also on TF; and
Ensure that authority responsible for bureaux de change and money transmitters (non-bank) is given appropriate regulatory powers and resources so that the authority can effectively conduct oversight, compel records, require remediation, and, where necessary, issue sanctions.
|Money value transfer services (SR.VI)|
Close the gap in the financial services area by ensuring that all entities that provide money or value transfer services are licensed and supervised;
Require that principals keep lists of all agents of money and value transfer service providers; and
Develop a mechanism to ensure that money and value transfer service providers can be sanctioned.
|4. Preventive Measures—Nonfinancial Businesses and Professions|
|Customer due diligence and record– keeping (R.12)|
Develop and apply strong requirements for customer due diligence for all categories of DNFBPs not subject to the requirements of the FSC issued AMLGNs 20 This should include provisions requiring ongoing monitoring; obtaining information on the purpose and intended nature of the business relationship; performing enhanced due diligence on higher risk customers or business relationships; and prohibiting the opening of an account or commencing business relationships when an entity cannot provide appropriate CDD information;
Address criteria 5.1, 5.2(c), 5.2(d), 5.2(e), 5.5.2(b), and 5.7 in law or regulation;
Ensure that DNFBPs are subject to adequate requirements for PEP clients or business relationships;
Address the risks associated with new technologies and nonface-to-face business;
Develop requirements for DNFBPs in the area of large, complex or unusual transactions to ensure that these are reviewed, with findings set in writing and kept for five years;
Address the lack of sanctioning ability for DNFBPs, other than TCSP, in the area of conducting appropriate customer due diligence.
Finalize the development and release of the regulations for the Conduct of Business (Fiduciary Services);
Finalize the new licensing agreement for the sole land based casino and include specific observance to the need to comply with the AMLGNs; and
Afford priority to the implementation of the new gambling Ordinance and resourcing of the GRA. The GRA should also give priority to releasing a Code of Conduct under its powers specifying the GRAs expectations for license holders to meet the legal AML/CFT obligations. Furthermore reference to, and adherence with, such a Code of Conduct should be mandatory in all licensing agreements for the gambling sector
|Suspicious transaction reporting (R. 16)|
Consider specifying time limits on consent and non consent letters to assist disclosing businesses to avoid inadvertent tipping off to customers; and
Remove the current s 33(1)(2)requirement in the new gambling ordinance that requires gambling licensees to in the first place make disclosures of the alleged money laundering to the gambling commissioner as opposed to the GFIU. This is necessary to maintain continued integrity and confidence in the confidentiality of the disclosure system.
|Regulation, supervision, monitoring, and sanctions (R.17, 24 & 25)|
Extend, in law or regulation, the provisions for internal control systems to cover the financing of terrorism in addition to AML;
Address the need for an audit function to test compliance with policies, procedures, and controls in DNFBP entities, not subject to the FSC issued AMLGNs;
Require screening procedures in DNFBP entities not subject to the FSC issued AMLGNs, to ensure high standards when hiring employees;
Extend the requirements related to dealing with clients in jurisdictions that do not or insufficiently apply the FATF Recommendations to all DNFBPs.
Consider a more proportional level of regulatory sanction for the non gambling and non-TCSP categories of the DNFBP sector;
Determine, implement and publicly declare the appropriate monitoring and sanctioning authority to be responsible for monitoring compliance with AML/CFT obligations by those categories of the DNFBP sector not subject to supervision by the FSC, the Financial & Development Secretary or future GRA.
Make mandatory the requirement for the gambling Licensing Authority to include in any license agreement that compliance with the AMLGNs and any subsequent Codes of Conduct that may be issued by the gambling commissioner is a condition of license.
Amend the Schedule 1, Section 4, of Gambling Ordinance 2005 to make mandatory requirements identified in subsection (a) through (k) and also that compliance with the AMLGNs and future codes of conduct issued by the GRA is an explicit condition of license;
Implement Gambling Ordinance 2005 as a priority;
Ensure that the GRA is allocated appropriate budget, staffing and other resources to properly meet the requirements established under the new gambling ordinance;
Develop sector-specific guidelines on AML/CFT for DNFBP entities not covered by the AMLGNs and the High-Value Dealers Guidance Notes, which cover both AML and CFT;
Ensure that the FIU provides guidance to all sectors regarding reporting requirements and typologies;
Identify and designate an appropriate authority to monitor DNFBPs (other than TCSP and the gambling sector) in the area of AML/CFT. Given the size of the jurisdiction consideration to using the FSCs expertise may be appropriate; and
Ensure that designated competent authorities (once designated) for DNFBPs are represented on the domestic Enforcement Committee.
|Other designated nonfinancial businesses and professions (R.20)|
|5. Legal Persons and Arrangements & Nonprofit Organizations|
|Legal Persons–Access to beneficial ownership and control information (R.33)|
Repeal legislation allowing share warrants to bearer;
Ensure that Companies House’s data base is searchable by all relevant fields;
Provide the FSC complete access to information on file at Companies House; and
Allow police and customs to compel production of client information required to be maintained by licensees under customer identification requirements in domestic and international criminal investigations. Use schedule 10 of the Companies Ordinance as a model.
|Legal Arrangements–Access to beneficial ownership and control information (R.34)|
Abolish or limit asset protection trusts, or failing that require disclosure of the name and address of the settlor in addition to the other information required in the registration application;
Amend trust legislation to restrict the use of “flee clauses;” and
Consider requiring trusts that hold shares in corporations to disclose the trust settlor, beneficiaries, and/or trustees.
|Nonprofit organizations (SR.VIII)|
Review the current legislation and approval and monitoring process in light of the FATF documents that the assessors provided to the Board; and
Review, in particular, the current policy of granting a blanket exemption from registration to religious charities.
|6. National and International Cooperation|
|National cooperation and coordination (R.31 & 32)|
|The Conventions and UN Special Resolutions (R.35 & SR.I)|
Request that the Vienna and ICSFT Conventions be extended to it at the earliest possible occasion.
|Mutual Legal Assistance (R.36, 37, 38, SR.V & 32)|
Gibraltar and U.K. authorities should move swiftly to conclude agreements to implement the MLA (International) Ordinance, in order to improve the ability of Gibraltar to provide mutual legal assistance to non-Schengen countries.
Gibraltar should amend the CJO to enable local authorities to secure restraint and charging orders in connection with nondrug related criminal investigations being conducted abroad.
Customs and police should have the authority to seize and detain suspicious cash and bearer negotiable instruments whose provenance is unknown, on the same terms as that provided by the DTO for seizure of cash suspected to be related to drug trafficking.
The governor should issue an order, pursuant to the terms of the CJO, promulgating a list of countries whose authorities are entitled to register and enforce nondrug related confiscation orders in Gibraltar.
Gibraltar authorities should clarify the authority of the GFIU to issue “nonconsent” letters, and issue guidelines for their use; and
Gibraltar authorities should compile in one location more detailed statistics on mutual legal assistance requests and responses.
|Extradition (R. 39, 37, SR.V & R.32)|
Consider elaborating procedures—including for example form response letters for requesters, checklists for dealing with HM Foreign Service, etc.—for responding to extradition requests in money laundering and terrorist financing cases.
|Other Forms of Cooperation (R. 40, SR.V & R.32)|
|7. Other Issues|
|Other relevant AML/CFT measures or issues|