Introduction

Under the European Union 4^th Anti-Money Laundering Directive (4MLD), Gibraltar has to consider the findings of the European Union’s Supra National Risk Assessment (“NRA”) in its own considerations.  The latest updated Gibraltar NRA was issued in August 2020. The purpose of the NRA is to identify threats and vulnerabilities in Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF). This is because it affects Gibraltar as a jurisdiction, as well as public sector bodies and the private sector.

The purpose of the National Risk Assessment is to provide a realistic strengths-weaknesses analysis in the field of Money Laundering and Terrorist Financing in Gibraltar. It also identifies existing and future risks so that they can be mapped effectively.

A copy of the National Risk Assessment can be found here.

Requirements for Private companies

Under the Proceeds of Crime Act (POCA), Relevant Financial Businesses (RFBs) are required to consider the National Risk Assessment in their own risk assessment frameworks. This will ensure that their systems of controls are commensurate with the risks present in Gibraltar. In many cases, this will mean that a company’s own risk register needs to be mapped against the NRA.

POCA does not permit a RFB to arrive at a conclusion on risk which is incompatible with the findings of the NRA. Therefore, those seeking seeking to apply simplified or enhanced Customer Due Diligence (CDD) must be made in light of the NRA findings.

By providing the private sector with clear indicators of those products, services and sectors which could potentially prove attractive to either ML or TF in the National Risk Assessment, the NRA should aid compliance officers and risk managers in making suspicious transaction reports (STRs) of a higher quality and focus their attention to those products and services of their firms which the NRA identifies as a higher risk.

Conclusion

All companies should take into account the updated National Risk Assessment when conducting their own risk assessment frameworks. This will ensure that their systems of controls are commensurate with the risks present in Gibraltar.

If you have any queries in this regard the team at TAG Consultancy will be happy to assist you. For our full list of Compliance services please click here.

Key definitions

Money laundering: The illegal process of concealing funds generated by a criminal activity. This includes drug trafficking or terrorist funding, which appear to have come from a legitimate source.

Terrorist Financing: The provision of funds for terrorist activity

Proliferation Financing: The act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons. In addition, that their means of delivery and related materials (including both technologies and dual use goods used for non-legitimate purposes), are in contravention of national laws or, where applicable, international obligations.