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GFIU points to increased reporting of suspicious activities in ‘high risk’ sectors

Photo by Eyleen Gomez

The Gibraltar Financial Intelligence Unit received over 3,500 reports of suspicious activity during 2022, ranging from suspected tax evasion to an organised crime group that was using pre-paid bank cards obtained with false documentation to withdraw cash.

Most of the reports related to suspicious activities in other countries and, in most cases, required no further action from the GFIU.

Of the total 3,503 reports made to the GFIU in 2022, the vast majority – or 2,893 – related to the gaming sector, with 56% of them coming from one single gaming company.

Of the total, only 167 related to activities with a Gibraltar connection.

That was a significant increase from the 77 Gibraltar-related reports submitted in 2021 but was due mainly to sanctions reporting against the backdrop of the west’s response to Russia’s invasion of Ukraine.

Details of the GFIU’s work were outlined in the unit’s latest annual report, published last week.

Under Gibraltar legislation that ties in with international reporting requirements, local businesses and financial institutions are required to flag up any activity suspected of being linked to crime.

The GFIU uses an online system called Themis to allow businesses to make suspicious activity reports online whenever suspicions are raised about potential criminal activity such as money laundering or terrorist financing.

The total number of reports was down 11% from the preceding year – largely due to fewer reports from the gaming sector compared to 2021 - but most of the higher risk sectors registered an increase in reporting.

In banking, for example, the number of suspicious activity reports increased by 60% year-on-year, while the increase in reports from trust and company service providers was 95%.

Money laundering and fraud remain the most prevalent suspected criminal activities reported.

Suspicion based on adverse open-source information and inadequate due diligence or failure to provide due diligence are the leading grounds for suspicion.

The GFIU attributed the increase to its Project Nexus outreach programme, which aims to enhance awareness on money laundering, terrorist financing, human trafficking and proliferation of weapons of mass destruction.

The programme also produces guidance on a number of areas which assists reporting entities in improving the quality of the suspicious activity reports.

Additionally, the GFIU has expanded its workshops on various economic crime topics through an e-learning platform, boasting over 500 users.

Writing in the annual report’s foreword, the GFIU’s Director, Edgar Lopez, reflected on the challenges the unit has been presented with during 2022 and how it has achieved results through innovation and technology.

“We have learnt a lot during the FATF post-observation period and we acted with agility to meet the recommendations,” he wrote.

“We took decisive steps to align our structure to meet demand and new challenges, particularly in strategic analysis and data quality analysis.”

The report also includes strategic analysis spanning from 2019 to 2022.

The GFIU said strategic analysis played a crucial role to better understand the evolving methods and vulnerabilities exploited by criminals and terrorists.

It can also assist in effective preventative measures that further help to mitigate risks and informs the development of future National Risk Assessments.

The GFIU said it had used technological advancements and new software applications to enhance internal processes, intelligence report productivity, and strategic analysis.

A significant milestone in the report has been the successful establishment of the Financial Liaison & Intelligence Network (FLINT), Gibraltar's public-private partnership aimed at combating money laundering, terrorist financing, and proliferation financing.

This partnership has been further strengthened through a memorandum of understanding with the UK's Joint Money Laundering Intelligence Task Force (JMLIT+).

“This collaboration enhances cooperation, facilitates the exchange of information and intelligence, and harnesses collective knowledge and experience to create an inhospitable environment for criminals involved in serious and organised crime in both Gibraltar and the UK,” No.6 Convent Place said in a statement.

The GFIU has also published its second three-year strategic plan, which outlines its objectives and priorities for this period.

It is based on four interconnected high-level priorities, known as the “four Es”, which describe how it intends to achieve its goals.

The plan, which has been developed in response to new challenges, also takes into account feedback from both public and private sectors.

Mr Lopez said “the plan builds upon the current momentum shaped by the GFIU’s experience during Moneyval and the FATF processes”.

The Minister for Justice, Samantha Sacramento, praised the high standard of the GFIU's work and its dedication to combating economic crime and expressed her satisfaction with its accomplishments in 2022, particularly in strategic analysis, international cooperation and outreach.

She also recognised the achievements over the last three years through the GFIU’s strategic priorities and will continue to support the GFIU with its new road map.

The GFIU was established in January 1996 with the aim of facilitating the receipt, analysis, and dissemination of suspicious transaction reports or suspicious activity reports from financial and other institutions.

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