At the Financial Action Task Force (FATF) post-plenary press conference in June, it was announced that Gibraltar has been grey listed and consequently joins the list of jurisdictions subject to increased monitoring.
In their latest statement, HM Government of Gibraltar (GoG) acknowledged that 76 of the 78 Recommended Actions identified by FATF in its 2019 mutual evaluation report have been rectified, apart from two:
- ensuring that supervisory authorities for non-bank financial institutions and DNFBPs use a range of effective, proportionate, and dissuasive sanctions for AML/CFT breaches; and
- demonstrating that it is more actively and successfully pursuing final confiscation judgements, through criminal or civil proceedings based on financial investigations.
According to the press release issued by GoG last week, it is their understanding that this is the first time in FATF’s history that a jurisdiction has been grey listed on account of just two identified deficiencies. In the past, action plans issued by the International Co-operation Review Group (ICRG) to grey listed countries typically highlight a handful of key or significant action points (more than two).
The decision certainly calls on other jurisdictions to take note of future implications. Will FATF apply a stricter stance with countries moving forward? Does it mean that smaller countries that naturally have less statistics on which to base the effectiveness of their actions are under more pressure? Given that there are no known thresholds or data standards that mutual evaluators base their decisions on, how can countries measure their own effectiveness to be certain they are meeting international standards?