The Financial Action Task Force (FATF) is an intergovernmental body founded in 1989 on the initiative of the Group of Seven (G7) to develop policies in order to combat Money Laundering (ML) and Terrorist Financing (TF).

Since 2000, FATF has built a‘blacklist’, (formerly called a ‘Call for Action’) and more recently introduced a grey list for other closely monitored jurisdictions. The grey list sets out the countries with deficiencies in their Anti- Money Laundering (AML) and CounterTerrorist Financing (CTF) controls. Countries on this list however have committed to address their shortcomings. Countries on the grey list are therefore subject to heightened monitoring, whereby the FATF either assesses them directly or uses FATF Style Regional Bodies (FSRBs) to report on their progress toward their relevant AML goals[1].Whilst the grey list classification is not as punitive as the blacklist, countries on the list can still face serious economic sanctions from institutions such as the International Monetary Fund (IMF) and therefore significant reputational damage.

In June of this year, Gibraltar was added to the grey list. At the time, FATF noted that the gambling sector was the predominant reason for Gibraltar’s presence on the list and commented that the authorities were not “applying sufficient fines for AML failings”[2].

As a result of being added to the list, Gibraltar has agreed to an action plan to improve itsAML measures. The plan primarily focuses on ensuring that Financial Institutions,(FIs), that are not banks, use a range of effective measures for AML findings.  

FATF president T Raja Kumar continued to focus onAML penalties as an area where Gibraltar must improve. “Gibraltar needs to increase the dissuasiveness of its penalties, in particular fines related to the gambling industry and the legal sector that serves these companies,” he said.

“Gibraltar is a small jurisdiction, but it is an offshore financial hub, and the home to many gambling companies.[3]”

However, inOctober the FATF met for its review of the countries stipulated on the grey list. Although Gibraltar was rumoured for review, the jurisdiction opted to defer its reporting to FATF so that they can focus on providing a more comprehensive progress report at a later date.

[1] Countries - FinancialAction Task Force (FATF) (fatf-gafi.org)

[2] Gibraltar defers FATF reporting as AML body calls for tougher fines (igamingbusiness.com)

[3] Gibraltar defers FATF reporting as AML body calls for tougher fines (igamingbusiness.com)