Gibraltar: An Overview

DOIhttps://doi.org/10.1108/eb027184
Publication Date01 Apr 1998
Pages174-180
AuthorBenjamin J.S. Marrache
SubjectAccounting & finance
Journal of Money Laundering Control Vol. 2 No. 2
Gibraltar: An Overview
Benjamin J. S. Marrache
Gibraltar is a self-governing British Dependent
Territory, which has been part of the European
Union since 1973, when it joined as a United
Kingdom Dependent Territory under Article
227(4) of the Treaty of Rome. It is, however,
exempted from the Common Customs
Tariff,
the
Common Agricultural Policy and Harmonisation
of Turnover Taxes (for example, there is no VAT
in Gibraltar). Indeed, it is the only one of the UK
dependencies which chose to do so.
As a result, EU directives apply in Gibraltar as
they would in any other EU Member State, this
includes the Money Laundering Directive. The
significance of direct access to the Single European
Market is a major consideration for the marketing
of Gibraltar as a financial centre and to this end,
Gibraltar has attempted to ensure that its legisla-
tion is consistent with EU standards.
Legislation in Gibraltar against money launder-
ing activities has existed since 1988. Under the
Drug Trafficking Offences Ordinance 1988, it was
an offence to assist another to retain the benefit of
drug trafficking, knowing or suspecting that the
other person was a drug trafficker or had benefited
from drug trafficking. As in the equivalent UK
legislation at the time (The Drug Trafficking
Offences Act 1986) a person was not guilty of the
offence if he had disclosed his knowledge or suspi-
cion to the Police or Customs Officer.
With the continued expansion of the financial
sector, the government introduced the Drug
Traf-
ficking Offence Ordinance 1995 (DTOO 95) in
March 1995, this replaced the 1988 Ordinance,
added further offences and also maintained the
disclosure provision to a Police or Customs
Officer. In its effort to strengthen further the
power of the relevant authorities, in April 1995 the
government also enacted the Drug Trafficking
(Money Laundering) Regulations 1995 which
required relevant financial businesses to have in
place systems and training to prevent money laun-
dering, and laid down identification and record-
keeping procedures. The procedures required
suspicion of drugs money laundering to be dis-
closed to a Customs Officer, as opposed to a
Police or Customs Officer.
On 1st January, 1996, the Criminal Justice
Ordinance 1995 (CJO 95) came into effect, which
extended the money laundering provisions to
encompass the proceeds of all criminal conduct, as
opposed to just drugs. The Ordinance includes
substantive offences equivalent to those in DTOO
95 and also replaces the Money Laundering Regu-
lations 1995 with a new set of measures to prevent
the use of the financial system for purposes of
money laundering. Under CJO 95, the disclosure
requirement is again to a Police or Customs
Officer.
The effect of these enactments was to bring
Gibraltar fully in line with EU directives on
money laundering legislation, particularly in
respect of the proceeds of criminal conduct beyond
that of drug trafficking alone.
LEGISLATIVE AND REGULATORY
STRUCTURE
Anti money laundering legislation in Gibraltar
derives from the following statutes.
Drug Trafficking Offences Ordinance 1995
Drug Trafficking (Prescribed Sum) Regulations
1995
Drug Trafficking Offences Ordinance 1995
(Designated Countries and Territories) Order
1995
Drug Trafficking (Detention and Forfeiture of
Cash) Rules 1995
Criminal Justice Ordinance 1995
The Drug Trafficking Offences Ordinance 1995
makes provision for:
(1) Confiscation Orders against persons con-
victed of drug trafficking offences.
(2) Mutual Legal Assistance currently restricted
to the enforcement and registration of orders
made in certain designated countries overseas.
(3) The seizure and detention of drug trafficking
money being imported or exported as a cash
sum of £10,000 or more.
(4) Offences in connection with the proceeds of
drug trafficking.
Page 174

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