European Commission stands by Gibraltar’s delisting amid right-wing pushback

The European Commission said Gibraltar’s framework to counter money laundering and illicit finance is “sufficiently comprehensive” to remove the Rock from the EU’s list of high-risk jurisdictions, adding it remains committed to updating the list “as soon as possible”.

The Commission confirmed its position after a report in the Spanish newspaper ABC claimed it had shelved plans to delist Gibraltar following opposition from right-wing parties in the European Parliament, which must rubber stamp the move.

The article in ABC, which was widely parroted by numerous media outlets, reported that Maria Luis Albuquerque, the Portuguese commissioner responsible for financial services, told MEPs last January that the Commission had put Gibraltar’s removal from the list “on standby”.

Yet despite clear opposition from conservative MEPs, the European Commission told the Chronicle this week that its position remains unchanged.

That opposition first emerged in April 2024 when the Commission presented a proposal, known as a Delegated Regulation, to delist Gibraltar after the Financial Action Task Force [FATF] had earlier removed the Rock from its own “grey list” of high-risk countries following a lengthy and detailed technical assessment.

At the time, the Commission also sought to delist Panama, the UAE, Barbados and Uganda, echoing developments at the FATF.

But MEPs in Strasbourg later voted overwhelmingly to reject the Commission’s proposal in respect of all those countries, with 490 in favour of the motion opposing the decision, 64 against and 56 abstentions.

The original motion did not mention Gibraltar but was amended by Spanish MEPs from the Partido Popular, Vox and Ciudadanos, including the PP hawk Jose Manuel Garcia-Margallo, who was then an MEP.

The Commission updates its high-risk list annually but postponed the 2024 update due to the parliamentary vote. A new review is expected in the coming months.

“The Commission was closely involved in the delisting process of Gibraltar within the FATF process,” a Commission spokesperson told the Chronicle this week.

“Following the FATF onsite visit, the FATF concluded that all the shortcomings with regard to its FATF Action Plan have been addressed.”

“No additional EU benchmarks were required for Gibraltar since the Commission had assessed that the FATF Action Plan was sufficiently comprehensive in view of the EU delisting criteria.”

“This is why, as per the Commission methodology for the identification of high risk third countries, the Commission proposed to delist Gibraltar in its latest Delegated Regulation updating the EU list of high-risk third countries.”

“After the European Parliament rejected it, the regulation was not published and, consequently, did not enter into force.”

“The Commission took note of the concerns raised by the European Parliament.”

“The Commission is committed to update the EU list of high-risk third countries in order to protect the Union financial system as soon as possible.”

Asked specifically for the Commission’s current position on Gibraltar having considered the concerns raised last year by the European Parliament, the spokesperson added: “Our position has not changed.”

The process will prove challenging, however.

In January, Spain’s Partido Popular said “only extraordinary political pressure” could prevent the Commission from attempting to delist Gibraltar again.

The PP called on the Spanish Government to “mobilise” to prevent Gibraltar being removed.

“For the PP, only extraordinary political pressure can stop the European Commission from putting [it] on the table again..,” said the PP MEP Dolors Montserrat at the time, in a statement issued via the European People’s Party, the largest political grouping in the European Parliament.

“In April 2024, thanks to the position defended by the PP, the European Parliament objected to the decision to exclude Gibraltar from this list, arguing that it had not clarified its stance on economic sanctions against Russia.”

“However, a new review of Gibraltar's status is expected in the coming months.”

“The international weakness of Pedro Sanchez’s government could leave Spain and the Campo de Gibraltar defenceless.”

She reiterated long-standing right-wing criticism of Gibraltar’s business model, arguing its removal from the EU list “should not even be considered” until a UK/EU treaty on the Rock’s future relationship with the bloc is finalised.

Gibraltar and the UK have consistently refuted this criticism, pointing to the FATF’s decision to remove Gibraltar from its grey list as evidence of compliance.

The Gibraltar Government, for example, dismissed as “baseless, totally unsubstantiated and gratuitous” the accusation that Gibraltar was lax in enforcing economic sanctions against Russia, citing high-profile and widely reported enforcement activity taken here in respect of assets held by designated individuals.

The Commission’s position, as stated to the Chronicle this week, aligned with a mid-February letter from John Berrigan, the European Commission’s Director General for Financial Stability and Capital Markets, to Gibraltar’s Minister for Justice, Trade, and Industry, Nigel Feetham.

Mr Berrigan, a veteran of nearly 40 years in Brussels, met Mr Feetham earlier in the month to discuss Gibraltar’s work on countering money laundering and illicit finance.

According to Mr Feetham, Mr Berrigan said in the letter that he was “well aware” of Gibraltar’s efforts to strengthen its regime to counter money laundering and illicit finance “beyond its FATF Action Plan”, progress which he “acknowledges” on behalf of the Commission.

Mr Feetham told the Gibraltar Parliament last week that the Government “will not rest” until Gibraltar is removed from the EU list.

“We will not remove our foot from the pedal until Gibraltar is legally removed from the EU list with our reputation justly restored," he said at the time.

Mr Feetham said the Commission’s proposal last year did not pass the parliamentary stage “chiefly for political reasons and because of concerns with respect to other jurisdictions on the list for removal”.

The timeline for a renewed Commission proposal remains uncertain as officials work to balance technical regulatory considerations with the political positions of the European Parliament.

Whenever a revised Delegated Regulation is introduced, further debate among MEPs is expected.

And while the Commission maintains that Gibraltar has met all necessary requirements, opposition in the European Parliament suggests that broader diplomatic and geopolitical factors will continue to shape the final decision.

Reacting to the latest developments, Mr Feetham said he believed the political groundwork was already being laid for the Commission’s next proposal.

“I believe the PP, supported by other right-wing parties in the European Parliament, is pre-emptively positioning itself against the European Commission’s expected publication of a delegated act proposing to de-list Gibraltar, thereby signalling its intention to actively oppose it once it is released,” he told the Chronicle.