Anti-Money Laundering, Combatting the Financing of Terrorism and Counter Proliferation Financing (AML/CFT/CPF)

The Office of Fair Trading has been appointed as a Supervisory Authority under the Proceeds of Crime Act 2015 (POCA) for High Value Good Dealers, Art Market Participants and Real Estate Agents & Letting Agents.

POCA is a Gibraltar law aimed at preventing the abuse of the financial system for the laundering or illicit money, the financing of terrorism and proliferation financing. It also sets out processes relating to the confiscation, investigation and recovery of the proceeds of unlawful conduct.

The OFT's aims is to prevent High Value Good Dealers, Art Market Participants and Real Estate Agents & Letting Agents from being used for money laundering, terrorist financing and proliferation financing through effective supervision, regulation and enforcement.

AML/CFT/CPF refers to laws and systems designed to prevent:

  1. money laundering;
  2. terrorist financing; and
  3. proliferation financing.

Money laundering, or ML, is the process of transforming and concealing the profits generated by criminal activity and corruption (such as drug trafficking, market manipulation, fraud, tax evasion and bribery) into a ‘clean’/legitimate asset which is in the banking system and where the illicit source of the money cannot be traced.
The buying and selling of high value goods in cash and real estate are recognised as major avenues for money laundering activity which is exploited by organised crime and corrupt officials. For more information about money laundering visit the Gibraltar Financial Intelligence Unit's website.

Terrorist financing, or TF, is defined in s.1ZA of POCA. It involves:

  1. the use of funds or assets;
  2. the making available of funds or assets; or
  3. the acquisition, possession, concealment, conversion or transfer of funds,
    for the purposes of terrorism.

For more information about terrorist financing, and for Counter Terrorist Financing Guidance visit the Gibraltar Financial Intelligence Unit's website.

Proliferation financing, or PF, refers to the act of providing funds or financial services which are used for the manufacture, acquisition, possession, development, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery. This is not an exhaustive definition and is indicative only. For more information about proliferation financing, visit the Gibraltar Financial Intelligence Unit's website.

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 2020 National Risk Assessment for AML/CFT and PF, the risk of high value goods being used for the laundering of money in Gibraltar is considered medium to low.

The OFT is responsible for ensuring that HVGDs comply with their legal AML/CFT/CPF obligations as set out in POCA. The follwing business are considered HVGDs by the OFT:

  1. Businesses that deal in high value goods whenever payment is made or received in cash and in an amount of €10,000 or more;
  2. Businesses which are open to accepting cash payments in an amount of €10,000 or more in relation to the sale or purchase of high vale goods, but have yet to receive such payments (Potential HVGDs); and
  3. Persons who by way of business trade or in act as an intermediary in the sale or purchase of, artistic works and the value of the transaction (or series of linked transactions) is in an amount of €10,000 or more (Art Market Participants).

In order to assist HVGDs to meet their AML/CFT/CPF obligations, and to explain how the OFT supervises the sector, the OFT have issued AML/CFT/CPF Guidance for HVGDs. It has also created a sample high value transaction form which may be used by HVGDs to keep appropriate records of cash payments.

While the money laundering and terrorist financing threat and vulnerability of REAs is considered lowly significant in HM Government of Gibraltar’s 2020 AML/CFT National Risk Assessment, the risk of real estate being used for the laundering of money in Gibraltar is medium. Gibraltar’s strong property market and stable economy can be attractive for money launderers. The risk of real estate being used for the financing of terrorism is considered low.

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.

MLROs of HVGDs 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 HVGDs and for REAs .

Format of report

The use of a standard format in the reporting of disclosures is important and all HVGDs and REAs are strongly encouraged to use GFIU’s online reporting system (Themis).  Access to this system can be obtained from the GFIU's website. 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.

SAR forms can also be downloaded from this site where it is not possible to get access to Themis and should be submitted to the GFIU by e-mail or delivered by hand to their offices at Suite 832, Europort. HVGDs and REAs are however strongly encouraged to use the Themis wherever possible.

Targeted Financial Sanctions

Targeted financial sanctions (TFS) are legal restrictions imposed by the United Nations, European Union, United Kingdom or Gibraltar against states, people, businesses, organisations and financial institutions (the designated persons or entities) to achieve specific international policy or security objectives. TFS includes both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of designated persons or entities.

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. The Act provides a 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.

Pursuant to section 8(3) of the Act, HVGDs and REAs must have policies, controls and procedures in place which ensure that:

  1. they are aware of the lists of persons and entities to whom international sanctions apply; and
  2. they undertake appropriate checks of the lists when undertaking business in relation to both new and existing customers.

The OFT recommends that HVGDs subscribe to the consolidated lists of UN, UK and EU sanctions and that they screen their customers against the lists in the ‘Sanctions’ section of the GFIU’s website and that they have systems in place to receive list updates through GFIU's Themis system

It should be noted that HVGDs and REAs should not rely exclusively on screening TFS lists and should deploy broader non-screening controls to effectively implement sanctions regimes.

For further practical information about sanctions, how they work and your obligations please refer to the section 8 of the OFT's AML/CFT Guidance Notes for HVGDs and for REAs and to the Gibraltar Financial Intelligence Unit's (GFIU) Financial Sanctions Guidance Notes.

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.

In order to meet its statutory obligations as supervisory authority under Proceeds of Crime Act 2015 (POCA), the OFT shall supervise HVGDs’ and REAs’ compliance with their AML/CFT obligations as set out in POCA and in the OFT’s Guidance Notes for HVGDs and for REAs respectively. The OFT's guidance notes should be regarded as regulatory standards for the purposes of the POCA and are issued pursuant to Section 11(3) of the Supervisory Bodies (Powers Etc.) Regulations 2017 (SBPR). Compliance with these guidance notes is enforceable pursuant to the provisions of POCA and of SBPR.

Supervision is mainly carried out in the following manner:

Documentation

HVGDs and REAs are required to submit up to date copies of various documents to the OFT in order for the OFT to ensure that the business understands its AML/CFT obligations and has put in place appropriate processes, procedures and controls. These include, but are not limited to:

  1. Business risk assessments;
  2. AML/CFT policies;
  3. MLRO nominations;
  4. Cash policies; and
  5. Organograms.
Annual Returns

HVGDs and REAs are required to submit Annual Returns to the OFT. The OFT collects and analyses the information and data submitted in the returns to assess the type and volume of transactions and business relationships entered into by the businesses. It also collects data about the industry generally that allows the OFT to identify ML/TF schemes and suspicious trends.

The submission dates and processes differ for HVGDs and REAs. For more information about the annual reporting requirements refer to Section 8 of the Guidance Notes. You can find the relevant documents here.

Onsite Visits

In order to determine the effectiveness of HVGDs' and REAs’ AML/CFT processes, procedures and controls, the OFT shall carry out onsite visits. We may also visit businesses if information suggests that your business may be exposed to a money laundering/terrorist financing risk.

The OFT will look at how your business applies its AML/CFT measures and assess whether your business understands its obligations and is effectively compliant. It will do so by looking at how you operate, reviewing documents and records and meeting with your employees, including senior management and the MLRO. It is also a good opportunity for you to ask about anything you’re unsure of regarding your AML/CFT obligations. For more information refer to our Onsite Visit Guidance.

The OFT’s Enforcement Powers

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 obligations or fulfil the requirements 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 in accordance with the OFT’s Enforcement Policy.

OFT Documents

High Value Good Dealers  
AML/CFT/CPF Guidance for High Value Good Dealers Download PDF
High Value Good Dealer 2021 Annual Return Download PDF
Money Laundering Reporting Officer (MLRO) nomination form Download PDF
High Value Good Transaction Sample Form (Goods >£2,000) Download PDF
CDD Sample Form HVGD 1 - Transaction details and CDD Download PDF
CDD Sample Form HVGD 2 - Risk Assessment Download PDF
Real Estate Agents
AML/CFT/CPF Guidance Notes for Real Estate Agents Download PDF
Real Estate Agent & Letting Agent Annual Financial Data Return Download PDF
Money Laundering Reporting Officer (MLRO) nomination form Download PDF
CDD Sample Form REA 1 - Transaction details Download PDF
CDD Sample Form REA 2A - Beneficial owners 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 OFT Guidance
AML/CFT Beneficial Ownership Guidance Notes Download PDF
AML/CFT Risk Assessment Guidance Download PDF
Onsite Visit Guidance Download PDF
AML/CFT Organogram Guidance Download PDF
AML/CFT Enforcement Policy Download PDF

Legislation

Proceeds of Crime Act 2015 Download PDF
Supervisory Bodies (Powers etc.) Regulations 2017 Download PDF
Register of Ultimate Beneficial Owners, Nominators and Appointors Regulations 2017 Download PDF
Terrorism Act 2018 Download PDF
Sanctions Act 2019 Download PDF

National Risk Assesment & Mutual Evalution Report

HM Government of Gibraltar AML/CFT & PF National Risk Assessment - August 2020 Download PDF
HM Government of Gibraltar AML/CFT & PF National Risk Assessment Executive Summary - August 2020 Download PDF
Moneyval Gibraltar Mutual Evalution Report - December 2019 Download PDF

Other Gibraltar Documents

GFIU Guidance Notes for Submission of Suspicious Activity Report Download PDF
GFIU/GFSC Counter Proliferation Financing Guidance Notes Download PDF
GFIU Financial Sanctions Guidance Notes Download PDF
GFIU Suspicious Activity Report form Download PDF
GFIU Counter Terrorist Financing Guidance Notes Download PDF

National Coordinator for AML/CFT Newsletters

4MLD and Amendments to POCA - August 2017 Download PDF
Gibraltar Based Non-Profit Organisations & the Risk of Abuse from Terrorist Funding - August 2017 Download PDF
Terrorism Act 2018 - February 2019 Download PDF
Sanctions Act 2019 - April 2019 Download PDF
Transposition of the 5th EU Money Laundering Directive - March 2020 Download PDF
Proceeds of Crime (Miscellaneous Amendment) Act 2021, Legislative Amendments - February 2021 Download PDF
Proceeds of Crime Legislative Amendments - March 2021 Download PDF
Sanctions against the Russian Federation - February 2022 Download PDF

FATF Guidance for HVGDs and REAs

Trade-Based Money Laundering (HVGDs) Download PDF
Best Practices on Trade-Based Money Laundering (HVGDs) Download PDF
RBA Guidance for Dealers in Precious Stones and Metals (HVGDs) Download PDF
Money laundering and terrorist financing through trade in diamonds (HVGDs) Download PDF
Money laundering/terrorist financing risks and vulnerabilities associated with gold (HVGD) Download PDF
Guidance for a Risk-Based Approach - Real Estate Sector (REAs) Download PDF
RBA Guidance for Real Estate Agents (REAs) Download PDF
Money Laundering and Terrorist Financing Through the Real Estate Sector (REAs) Download PDF
Politically Exposed Persons (HVGDs and REAs) Download PDF

Gibraltar Financial Intelligence Unit

The Gibraltar Financial Intelligence Unit (GFIU) gathers, stores, analyses and disseminates intelligence related to criminal conduct, (including but not limited to money laundering, the financing of terrorism and the proliferation of weapons of mass destruction), transacted or attempted to be transacted through relevant financial businesses in accordance with the Proceeds of Crime Act 2015, the Terrorism Act 2018, and the Drug Trafficking Act 1995.

Suspicious Activity Reports are submitted by REAs and HVGDs to GFIU and Sanctions reports are also made to the GFIU. The OFT storngly encourages all REAs and HVGDs to sign up to the GFIU's Themis online system and to undertake training provided thorugh GFIU's eNexus platform.

Suite 945 Europort, Gibraltar

Tel:(+350) 200 43618.

If busy call: (+350) 200 70211

Out of Hours (Urgent calls only e.g. Terrorist Financing): (+350) 56346000

e-mail: admin@gfiu.gov.gi

 

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

E-mail: information@fsc.gi

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

Europort

Suite 603

GX11 1AA Gibraltar

Tel: 00350 20064142

Fax: 00350 20064150

Email: gamblinglicensing@gibraltar.gov.gi

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.investigations@hmcustoms.gov.gi

www.hmcustoms.gov.gi

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.

www.fatf-gafi.org/home/