Gibraltar dismisses laundering concerns

The chief minister of Gibraltar has hit back at the National Audit Office over concerns that the UK’s overseas territories lack the resources to deal with money laundering.

An NAO report late last year raised fears about British overseas territories, and their ability to deal with suspicious activity reports in particular. Those worries were echoed by the Public Accounts Committee earlier this year.

Peter Caruana, Gibraltar’s chief minister since 1996, said: ‘There’s no lack of capacity either for receiving [or investigating] reports. There’s no shortage of investigative resource or inclination to investigate.’

Caruana said that the balance of suspicious activity reports to convictions, which had prompted the concerns, was ‘entirely logical’.

‘Places like Gibraltar are in receipt of enquiries, but the essence of the transaction is unlikely to be in Gibraltar. It’s reasonable that there’s an imbalance of reports against prosecutions,’ Caruana said.

The NAO study said Gibraltar had received 108 suspicious activity reports in 2005 but secured no local prosecutions and had only one prosecution pending.
‘The fact that there are so many reports suggests that our financial intelligence unit works well,’ said Caruana. ‘Those reports are passed on. It’s a good sign. It would be a bad sign if you had a finance centre which didn’t report even suspicious transactions.’

Like many offshore centres, the territory is trying to shake off its offshore tax haven tag and fighting any suggestion that money laundering goes on there. Critics view the low taxes and separate regulatory systems of many of the UK’s overseas territories as suspicious.

Caruana said that Gibraltar was not in dispute with the OECD and any other multilateral institution over the issues, that the IMF had issued a positive report on Gibraltar, and that the UK Treasury had been very supportive in helping with transparency issues.

Caruana stressed that the NAO’s enquiries did not mean that it had come to Gibraltar to assess the quality of its controls.

‘It was not an audit of the overseas territories, but an audit of the FCO and how it is discharging its responsibilities to the territories,’ he said.