Anti-Money Laundering and Countering the
Financing of Terrorism (AML/CFT)
Money laundering is the process of transforming and concealing the profits generated by criminal activity and corruption (such as drug trafficking, fraud and tax evasion) into a ‘clean’/legitimate asset.
The Office of Fair Trading has been appointed as a supervisory authority under the Proceeds of Crime ACT 2015 (POCA). POCA is a Gibraltar law aimed at preventing the abuse of the financial system for the laundering or illicit money and the financing of terrorism. It also sets out processes relating to the confiscation, investigation and recovery of the proceeds of unlawful conduct.
The OFT will be specifically regulating High Value Dealers and Real Estate Agents for compliance with anti-money laundering and combatting the financing of terrorism (AML/CFT) legislation. The OFT aims to prevent High Value Dealers and Real Estate Agents being used for money laundering and terrorist financing through effective supervision, regulation and enforcement.
High Value Dealers (HVDs)
The buying and selling of high value goods is internationally recognised as a major avenue for money laundering activity which is very attractive to criminals seeking to launder illicit funds. Proceeds of crime are used to purchase high value goods as part of the layering and integration stages of money laundering.
According to HM Government of Gibraltar’s 2018 AML/CFT National Risk Assessment, the risk of high value goods being used for the laundering of money in Gibraltar is considered moderate to low.
HVDs are businesses that accept cash payments in any currency with a value which is equal to, or greater than, €15,000.00 in exchange for goods. The OFT will consider any transaction for goods which is equal to, or greater than, £8,000.00 as a high value transaction (or any currency equivalents based on the exchange rate at the time of the transaction). This monetary threshold does not apply to debit or credit card payments nor does it apply to payments in cash for tobacco which is regulated separately by HM Customs). Multiple transactions from the same customers may cumulatively be considered as surpassing the monetary threshold if the are considered related. Any business accepting such payment is required to follow the requirements of POCA and to report annually to the OFT.
In order to assist HVDs with compliance of their AML/CFT obligations, and to explain how the regulation process will be enforced, the OFT have issued AML/CFT Guidance Notes for High Value Dealers. We have also created a sample high value transaction form which may be used by HVDs to keep appropriate records of cash payments.
The OFT has also created obligations for:
- Potential HVDs - dealers in goods which have not yet received a payment in cash above the monetary threshold but are open to accepting such cash payments (see Chapter 9 of the Guidance Notes); and
- High Risk Dealers (HRDs)- businesses that have not received payments above the monetary threshold but are dealers in goods which are considered to have a higher inherent risk and vulnerability to money laundering and terrorist financing (see Chapter 10 of the Guidance Notes).
Real Estate Agents (REAs)
The risk of real estate being used for the laundering of money in Gibraltar is moderate as set out in HM Government of Gibraltar’s AML/CFT National Risk Assessment. Gibraltar’s strong property market and stable economy can be attractive for money launderers.
In order to assist REAs to comply with their AML/CFT obligations under Proceeds of Crime Act (2015), the OFT have created easy to follow Guidance Notes. The purpose of these is to ensure all REAs are fully aware and compliant with their AML/CFT obligations and are aware of the OFT's regulatory approach for this sector. The guidance therefore also sets out REAs' reporting obligations to the OFT.
Our aim is to increase awareness and understanding of potential risks, best practices, the establishment of AML/CFT procedures and other practical measures to mitigate risks. Even though most real estate transactions involve other regulated entities such as banks, law firms and other institutions, risk factors must be identified by REAs to avoid becoming a target to criminal organisations looking to launder illicitly obtained money. REAs must therefore be aware of the risk posed by the purchase of real estate as a tool for placement, layering and integration of funds from illicit sources. Schedule 2 of the Guidance notes sets out examples of common money laundering methods and schemes to assist REAs with this process.
The guidance notes should be read in conjunction with the REA codes of conduct.
The OFT’s Enforcement Powers
The OFT will require both HVDs and REAs to report annually to the OFT in order to allow it to carry out its regulatory function and to prevent money laundering and terrorist financing.
The OFT works closely with the GFIU (Gibraltar Financial Intelligence Unit), other Government entities and other regulatory entities in relation to AML/CFT matters. It uses various sources to acquire information and data to identify businesses which are a high risk of being targeted by criminal organisations for the laundering of money.
The Proceeds of Crime Act 2015 (the Act) and the supporting Supervisory Bodies (Powers etc.) Regulations 2017 provide the OFT with powers to take enforcement action against those business who have failed to fulfil their POCA responsibilities or fulfil the requirement set out in the OFT's AML/CFT Guidance Notes. This may include the imposition of financial penalties and other disciplinary measures including suspensions or withdrawal of licences, temporary bans from managerial positions and the giving of directions.
Suspicious Activity Reports
MLROs of HVDs and REAs must be aware of daily transactions and monitor any suspicious activities that might be linked to money laundering or terrorist financing. Where necessary the MLRO must report such activities or risks to the Gibraltar Financial Intelligence Unit (GFIU) by submitting a Suspicious Activity Report (SAR). Where a REA suspects, or has reasonable grounds to suspect, that a transaction is related to ML/TF it is required to report it promptly to the GFIU. This includes attempted transactions. For more guidance and information please refer to Chapter 5 of the OFT's AML/CFT Guidance Notes for HVDs and for REAs .
Format of report
The use of a standard format in the reporting of disclosures is important and all HVDs and REAs are strongly encouraged to use GFIU’s online reporting system (Themis). Access to this system can be obtained from the GFIU (https://www.gfiu.gov.gi/reporting). Further information and advice on Themis can be obtained from GFIU (see 'Useful Contacts' below).
Sufficient information should be disclosed on the suspicious transaction, including the reason for the suspicion, to enable the investigating officer to conduct appropriate enquiries. The suspected criminality must be stated so that the report may be passed to the appropriate investigation team with the minimum of delay.
Where additional relevant evidence is held which could be made available to the investigating officer, this should be added to the disclosure. Themis allows for the disclosure of additional information in various formats.
High Value Dealers AML/CFT Guidance Notes for High Value Dealers Download PDF High Value Dealer Survey Download PDF High Value Dealer Annual Report form Download PDF AML/CFT officer nomination form Download PDF Sample HVD High Value Transaction form Download PDF Real Estate Agents AML/CFT Guidance Notes for Real Estate Agents Download PDF Real Estate Agent Survey Download PDF Real Estate Agent Annual Report form Download PDF Money Laundering Reporting Officer nomination form Download PDF CDD Sample Form REA 1 - Transaction details Download PDF CDD Sample Form REA 2A - UBO Natural Person Download PDF CDD Sample Form REA 2B - Companies Download PDF CDD Sample From REA 2C - Trusts Download PDF CDD Sample Form REA 2D - Other entities Download PDF CDD Sample From REA 3 - Risk Assessment Download PDF Other Guidance AML/CFT Beneficial Ownership Guidance Notes Download PDF AML/CFT Enforcement Policy Download PDF
Proceeds of Crime Act 2015 Download PDF Supervisory Bodies (Powers etc.) Regulations 2017 Download PDF Terrorism Act 2018 Download PDF Sanctions Act 2019 Download PDF
Other Gibraltar Documents
GFIU Suspicious Activity Report form Download PDF HM Government of Gibraltar AML/CFT National Risk Assessment Download PDF 4MLD and Amendments to POCA Newsletter Download PDF Gibraltar Based Non-Profit Organisations & the Risk of Abuse from Terrorist Funding Newsletter Download PDF Terrorism Act 2018 Newsletter Download PDF Sanctions Act 2019 Newsletter Download PDF
FATF guidance to assist HVDs and REAs
FATF Trade-Based Money Laundering Download PDF FATF Best Practices on Trade-Based Money Laundering (HVD) Download PDF FATF RBA Guidance for Dealers in Precious Stones and Metals (HVD) Download PDF FATF Money laundering and terrorist financing through trade in diamonds (HVD) Download PDF FATF Money laundering/terrorist financing risks and vulnerabilities associated with gold (HVD) Download PDF FATF RBA Guidance for Real Estate Agents (REA) Download PDF FATF Money Laundering and Terrorist Financing Through the Real Estate Sector (REA) Download PDF
Sanctions & High Risk Jurisdictions
Sanctions is a general term used for a defined set of actions, including permissions or restrictions, taken by countries on a global basis, to which other countries or persons are subject. Sanctions may be imposed on people, businesses, organisations and financial institutions and you are generally not allowed to deal with these people by law. All customers must therefore be checked on the international sanctions lists.
On the 28th March 2019 HM Government of Gibraltar published the Sanctions Act 2019 (the “Act”) to give effect to numerous international requirements relating to financial and other sanctions. This Act consolidates and makes it clearer for businesses to understand what international, and local sanctions apply in given circumstances. The Act provides for a new regime to implement both international and domestic sanctions in Gibraltar. These sanctions include financial
sanctions, immigration sanctions, trade sanctions, aircraft sanctions and shipping sanctions. For more information on the Act please refer to the National Coordinator for Anti-Money Laundering and the Combatting of Terrorist Financing's Sanctions Act 2019 Newsletter.
For further practical information about sanctions, how they work and your obligations please refer to the Gibraltar Financial Intelligence Unit's (GFIU) Sanctions Guidance Notes. For access to the lists please refer to the ‘Sanctions’ section of the GFIU’s website.
High Risk Jurisdictions
The FATF identifies jurisdictions with weak measures to combat money laundering and terrorist financing (AML/CFT) in two FATF public documents that are issued three times a year. These documents may be accessed on the FATF website.
Gibraltar Financial Intelligence Unit (GFIU)
The Gibraltar Financial Intelligence Unit receives, analyses and disseminates financial intelligence gathered from Suspicious Activity Reports (SARs).
Suite 832, Europort Gibraltar
Tel: (+350) 20070211
Fax: (+350) 20070233
Gibraltar Financial Services Commission
The Gibraltar Financial Services Commission (GFSC) is the financial services regulator in Gibraltar and regulates auditors, banks, company managers, e-money institutions, professional trustees, payment services providers, funds and fund services providers, insurance companies, managers and intermediaries, investment firms and insolvency practitioners. If your business involves any of the above, your supervising authority may be the GFSC rather than the OFT.
Atlantic Suites, Suite 3, Ground Floor, Gibraltar
Tel: (+350) 20040283
Fax: (+350) 20040282
Gambling Division - H.M Government of Gibraltar’s
The Gambling Division is the regulator for all gambling related matters in Gibraltar and is also appointed as a supervisory authority under the POCA. If your business involves gambling, your supervising authority may be the Gambling Commission rather than the OFT
GX11 1AA Gibraltar
Tel: 00350 20064142
Fax: 00350 20064150
HM Customs Gibraltar
HM Customs Gibraltar is the supervisory authority for the trade in tobacco in Gibraltar.
Customs House, Waterport, Gibraltar
Tel: (+350) 20078879/20079988
Fax: (+350) 20049278
Financial Action Task Force (FATF)
FATF is an inter-governmental body whose objectives is to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF's website is an excellent resource for both HVDs and REAs containing numerous guidance notes and typologies to help these meet their AML/CFT requirements.