Gibraltar’s imminent removal from FATF grey list

Lea Hogg October 31, 2023

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Gibraltar’s imminent removal from FATF grey list

British overseas territory Gibraltar, may be removed from the Financial Action Task Force’s (FATF) grey list, a development anticipated to be formalized in the FATF’s next plenary session scheduled for February 2024.

The announcement was made by FATF President Raja Kumar, who confirmed that Gibraltar had made substantial progress in implementing its action plan, and the final step before its removal is an on-site inspection to verify the progress made.

Progress and optimism

The journey toward Gibraltar’s potential exit from the FATF grey list has been marked by determined efforts to address anti-money laundering (AML) and counter-terrorism financing (CTF) concerns. The FATF, the global watchdog in the fight against financial crime, has recognized Gibraltar’s commitment to enhancing its regulatory framework.

The on-site inspection, which marks the final stage of the process before removal from the grey list, will focus on confirming the effective implementation of AML/CTF reforms. It will also assess the political will to sustain these reforms in the future.

The Gibraltar government is optimistic that the FATF will ultimately remove the territory from the grey list. Nigel Feetham KC, Gibraltar’s Minister for Justice, Trade, and Industry, expressed the local sentiment, stating, “Everyone in Gibraltar will be delighted by this news and warmly welcome this highly positive outcome. I wish to thank all of those authorities who have worked tirelessly in this process and continue to support us in our work to address these action points and remove Gibraltar from the grey list at the earliest possible opportunity.”

Journey to redemption

Gibraltar’s placement on the FATF grey list occurred in the FATF’s June 2022 plenary session, where Malta was also removed from the list. This designation had implications for Gibraltar-based companies, subjecting them to increased compliance costs and making it more challenging to access financial services.

The then FATF Chair, Marcus Pleyer, (in photo above), explained that Gibraltar’s role in the online gambling hub. He said that a key concern was Gibraltar’s failure to impose appropriate sanctions on gambling operators for AML/CTF deficiencies.

Following the June 2022 plenary session, the FATF presented Gibraltar with an action plan aimed at enhancing its financial regulatory framework. The plan called for granting increased powers to financial regulators to impose regulatory sanctions and demonstrating a more active pursuit of confiscation orders.

Initially, the government anticipated completing the action plan within 12 months, setting a May 2023 deadline. However, this timeline proved to be overly ambitious. By June 2023, the FATF issued a warning to Gibraltar that “all deadlines have now expired.” Consequently, the territory was urged to expedite the completion of its action plan.

Throughout this period, Gibraltar has demonstrated a strong commitment to the FATF process.

Nigel Feetham said that the this commitment was top priority, adding, “We have totally committed to this process and look forward to continuing to engage with the FATF as we further develop our strategies in our fight against economic crime.”

The imminent exit from the grey list not only signifies Gibraltar’s dedication to improving its financial regulatory system but also presents an opportunity for the territory to regain full access to the international financial community, reducing compliance costs and adopting a more favourable environment for financial activities.

As the February 2024 plenary session approaches, Gibraltar remains focused on ensuring it meets the FATF’s standards for a safer and more secure financial system.