Gibraltar – Know Your Customer (KYC) Rules

 

 

Gibraltar, an overseas territory of the United Kingdom (UK), is part of the European Union. A November 2006 referendum resulted in constitutional reforms transferring powers exercised by the UK government to Gibraltar. Gibraltar has an international financial center which is small internationally, but large in comparison to its domestic economy. The financial services sector has strong ties to London, the Crown Dependencies, Israel and other financial centers. Bordering Spain and near the north coast of Africa, Gibraltar is adjacent to known drug trafficking and human smuggling routes and is heavily policed on land and at sea because of the risk of these activities occurring within its borders or territorial waters.

Gibraltar is exposed to money launderers located in drug producing centers in Morocco and drug consumption and distribution networks in Spain. With the establishment in southern Spain of organized criminal activities from Eastern Europe, there is potential for launderers to use Gibraltar as a base for money laundering. These risks are mitigated by the small coastline and effective policing. Border controls between Gibraltar and Spain also help deter potential money launderers wishing to use Gibraltar for their activities.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: NO

Gibraltar – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Gibraltar Law:

    • Banks
    • Mutual savings companies
    • Insurance companies
    • Financial consultants
    • Investment businesses
    • Postal services
    • Exchange bureaus
    • Attorneys
    • Accountants
    • Financial regulatory agencies
    • Unions
    • Casinos
    • Lotteries
    • Charities
    • Car dealerships
    • Yacht brokers
    • Company formation agents
    • Political parties
    • Real estate agents
    • Notaries
    • Dealers in gold bullion and high value goods

Gibraltar – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 362 in 2011

Number of CTRs received and time frame: Not available

The following is a list of STR covered entities covered by Gibraltar Law:

    • Any legal person, whether or not they conduct financial services

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: Not available
Convictions: Not available

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Gibraltar has a comprehensive range of anti-money laundering/counter-terrorist financing (AML/CFT) laws. The criminal laws on money laundering have been consolidated in draft form, and powers presently available only in drug-related money laundering cases are being extended to money laundering cases involving the proceeds of other crimes. The Financial Services Commission (FSC), a unified regulatory and supervisory authority for financial services, notes the increasing sophistication of money launderers. The FSC should continue to review regulatory and supervisory practices to keep pace with new developments.

Gibraltar, as a UK overseas territory, cannot sign or ratify international conventions in its own right. Rather, the UK is responsible for Gibraltar‘s international affairs and may arrange for the ratification of any convention to be extended to Gibraltar. The UN Convention against Transnational Organized Crime was extended to Gibraltar in 2007. The 1988 Drug Convention, the UN Convention against Corruption, and the International Convention for the Suppression of the Financing of Terrorism have not yet been extended to Gibraltar, although the legislation for such extension is in place.