Isola ‘100% confident’ Gibraltar will get off FATF grey list

The Minister for Finance, Albert Isola, told GBC’s Viewpoint last week that he is “100% confident” Gibraltar will be removed from the Financial Action Task Force’s “grey” list of high-risk countries, though he would not be drawn on detail of timings.

The FATF is due to hold a plenary session later this week but its deliberations ahead of that are confidential and there was no indication as to whether Gibraltar would be removed at this session.

Gibraltar was placed on the FATF list in June 2022 following a MONEYVAL mutual evaluation report that contained 78 recommended actions.

Gibraltar had complied with all but two of those actions and, while disappointed with the FATF’s decision, agreed an action plan to address the two outstanding points by May this year. No other country or jurisdiction has ever been placed on the grey list because of just two points.

After the last plenary session in Paris last February, the FATF said Gibraltar had taken steps to strengthen the effectiveness of its regime to tackle money laundering and terrorist financing.

It said Gibraltar had shown that supervisory bodies in sectors such as gaming, law, real estate and company management had demonstrated effective action to tackle breaches of rules on anti-money laundering and combating the financing of terrorism (AML/CFT).

But the FATF also said Gibraltar should continue work to show it can pursue confiscation judgments “commensurate with the risk and context of Gibraltar”.

On Viewpoint, Mr Isola left no doubt as to the extensive work that had been carried out in Gibraltar to meet the remaining FATF recommendations, which included advancing criminal cases and civil recovery matters to achieve more final confiscation judgments, and also pursuing asset recovery in line with the Rock’s risk and context.

“What I can tell you is that this process has been incredibly painful, and I say painful in the sense of the amount of work that we have had to do over the past five years, not just in the last 12 months,” Mr Isola said.

“And that involves all the regulatory authorities, the police, Customs, the OFT, the lawyers regulatory authority, GFIU, all coming together to work together to satisfy the evaluators of where we are.”

“Last June there were two points, and we were the first jurisdiction to be placed on the grey list for two points outstanding.”

“One of them we have dealt with, so we are left with one final point to be delivered.”

“I have 100% confidence that we will meet that one point.”

“I take it that we have already met it and it’s a work in progress and we will come off the grey list.”

Mr Isola added: “Has this helped? No, of course not.”

“Would I like off it? Absolutely yes. So would everyone else involved.”

Mr Isola said the process for the MoneyVal evaluation began some seven years ago, with the serious work commencing two years later.

“If you look at this coldly as a jurisdiction wanting to get better, which we do, and I look at where we were five years ago and I look at where we are now, you can’t compare, it’s chalk and cheese,” Mr Isola said.

“The level of knowledge, the level of expertise there is in [anti money laundering] today and what there was then, is beyond comparison.”

“So, we are in a much better place as a result of this painful process, Gib is all the better for for it.”

“Do I want to get off this grey list? You are damn right I do.”

“And am I determined that we will? You are damn right we are.”

Mr Isola told GBC that there is “nothing left unlooked at” by evaluators in Paris, adding that Gibraltar’s progress is scrutinised in “enormous detail”.

TREATY DELAYS

New businesses are still looking to come to the Rock and registering with the Financial Services Commission despite the uncertainty and delays to Gibraltar’s Withdrawal Agreement with the European Union.

“That’s not a bad place to be,” Mr Isola said.

“We still have some new businesses wanting to come to Gibraltar, new businesses that I am very excited about, certainly in gaming.”

“If we are going to judge that answer by levels of business coming in, professionals are telling me they have never been busier, so then bring on the uncertainty.”

Mr Isola said he had hoped to already have a Brexit treaty in place, but added it has “not been easy” for the Chief Minister, Fabian Picardo, and his negotiating team who have been dealing with the UK Government, the Spanish Government and the European Union.

“When I joined politics 10 years ago, I never imagined we would be facing the curveballs that we have – Brexit, Covid, treaty, Withdrawal Agreement,” Mr Isola said.

“I mean, these are fundamental challenges to our quality of life and if there’s one thing we have always focused on is ensuring that the red lines aren’t crossed, ensuring that everything we do is in Gibraltar’s best interest and enabling us to keep the economic model so that we are strong enough to say no if we have to.”

SPANISH BLACK LIST

Last March, the Chief Minister told Parliament the process has begun to remove Gibraltar from Spain’s blacklist of tax havens, adding that Gibraltar would withdraw from the tax treaty if Spain did not fulfil its commitments.

Quizzed on this, Mr Isola said it was “necessary” for Gibraltar to be removed from Spain’s blacklist, adding: “I believe we will be removed.”

“If I would have told you 10 years ago that there was a chance of us entering into a tax treaty with Spain, you would have thrown me out of the room thinking I was insane,” Mr Isola said.

“I think that to be able to get in the room to have a discussion about a tax treaty is remarkable and to actually have secured one is actually quite incredible.”

He said this is one of this Government’s “key achievements, both diplomatically and commercially”.

CRYPTO

Mr Isola said the EU’s introduction of its own cryptocurrency licencing regime, MiCA, illustrated how Gibraltar’s decision some years ago to regulate this sector had been correct.

He said Gibraltar should be proud of everything it has done in this sphere.

He welcomed more and more countries introducing regulatory frameworks for cryptocurrency “so that the standards and behaviours continuously rise up to the standards that we have set”.

Asked to comment on the Globix case, Mr Isola said the only link that it has with Gibraltar is that the director of the BVI-registered business was Gibraltarian and had sought investors here.

Liquidators are working to trace some $42 million in digital assets after the company was placed into insolvency.

Though many Gibraltarians are among those unable to access their investments with the company, Mr Isola said no one had come to the regulator to make a complaint.

In light of what has happened with Globix, Mr Isola was asked what safeguards are in place for future investors.

“We have got to get better at ensuring that we are policing the periphery to get smarter if somebody tries to do something like this again,” Mr Isola said.

POWER CUTS

Mr Isola said certain procedures are in place for contractors before they start on any development, and if they have not got site clearance and cause the whole of Gibraltar to have a power cut, then they “should be penalised”.

He said the old MoD power lines relate to the South District, where constructors do not have “complete clarity” because of outdated network maps.

“But there has not been one infraction of our infrastructure in respect of those,” he said.

“There has been site clearance requested and given, and it hasn’t been followed.”

“In one case there was no site clearance at all, they just went in and did it, they took a shortcut.”

Mr Isola said letters have gone out to these contractors, adding that legislation will soon be published “which will go out further than simply recovering costs”.

Quizzed on whether businesses will be able to claim compensation, Mr Isola said that “it is not feasible”.

GHA

Mr Isola said the “letting the professionals to deliver quality care” is the right thing to have done, adding that the GHA is now in the process of recruiting a Director General to take up the role in September.

It has been “business as usual” with the GHA’s Director General, Dr Patrick Geogheghan, despite him seeking medical care for cancer at the moment.

Mr Isola would not comment further on who the next appointee would be, but added there was a “rigorous process” for all stakeholders involved.

He said the quality of care provided by the GHA has improved in the past few years. in the past few years.