Gibraltar

Last updated: 19/02/2007

CENTRAL AUTHORITY FOR REPORTING

ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

The scope of money laundering offences, and the similar provisions in the Drug Trafficking Offences Ordinance is very wide. They are of universal application and so affect not only banks and other financial institutions, but all other businesses which are all vulnerable to be used by the money launderer including estate agents, car and boat dealers, lawyers, accountants, bureaux de change, safety deposit box companies, jewellers, gold and bullion dealers, casinos and the like. Any person accepting money or other property from an individual knowing or suspecting that it represented the direct or indirect proceeds of drug trafficking or other criminal conduct as defined above would be vulnerable to prosecution. In cases of doubt the matters may be referred to GFIU. Additionally, independent legal advice should be sought.

LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

Anti-money laundering legislation in Gibraltar derives from the following statutes:

ORD 6 1995 Drug Trafficking Offences Ordinance, 1995
LN 30 1995 Drug Trafficking Offences (Prescribed Sum) Regulations, 1995
LN 41 1995 Drug Trafficking Offences Ordinance 1995 (Designated Countries and Territories) Order, 1995
LN 62 1995 Drug Trafficking (Detention and Forfeiture of Cash) Rules, 1995
LN 139 1997 Drug Trafficking Offences Ordinance 1995 (Designated Countries and Territories)(Amendment) Order, 1997
LN 111 1999 Drug Trafficking Offences Ordinance 1995 (Designated Countries and Territories) Order, 1999
ORD 14 1995 Criminal Justice Ordinance, 1995

IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

Anti-Money Laundering Guidance Notes.

"Gibraltar's Financial Services Commission has issued a consultation paper concerning the revised guidance notes on combating money laundering and terrorist financing." 1

UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT?

There is a statutory obligation on all staff to report suspicions of money laundering. Section 18 contains the requirement to report to the "Appropriate Person" (for the purpose of these Guidance Notes called the Money Laundering Reporting Officer) in accordance with internal procedures. In line with accepted practice, some businesses may choose to require that such unusual or suspicious transactions be drawn initially to the attention of supervisory management to ensure that there are no known facts that will negate the suspicion before further reporting on to the Money Laundering Reporting Officer or an appointed deputy.

LAWYER RESPONSIBILITY/LIABILITY

Section 9(1) provides that no person shall in the course of relevant financial business carried on by him in or from Gibraltar, form a business relationship or carry out a one-off transaction unless he introduces the following procedures in relation to that business -

Notwithstanding Section 14 of the Companies (Taxation and Concessions) Ordinance:-
1. Identification procedures in accordance with Sections 11 and 13;
2. Record-keeping procedures in accordance with Section 16;
3. Except where the person concerned does not employ or act in association with any other person, internal reporting procedures in accordance with Section 18;
4. Such other internal control and communication procedures as are appropriate to forestall and prevent money laundering;
Takes appropriate measures to make employees handling financial business aware of -
1. The procedures he has adopted under paragraph (a) maintained by him which relate to the relevant financial business in question, and
2. The enactments relating to money laundering; and
Provides his employees with training in the recognition and handling of transactions carried out by or on behalf of any person who is, or appears to be engaged in money laundering.

CLIENTS IDENTIFICATION AND VERIFICATION

Whenever the opening of a business relationship is being considered, or a one-off transaction or series of linked transactions of €15,000 or more is to be undertaken, identification procedures must be followed. Identity must also be verified in all cases where money laundering is known, or suspected.
The following documents should be collected:

The physical person.
The physical identity (eg. name, date of birth, registration number); and the activity undertaken.
Confirmation of a person’s address is also useful in determining whether a customer is resident in a high-risk country.
Personal Applicants for Business.
Where verification of identity is required, the following information should be obtained from all individual applicants for business, and should be independently verified by the institution itself:
- True name and/or names used;
- A current address;
- Details of occupation/employment and sources of wealth or income
One or more of the following steps is recommended to verify addresses:
- Checking the Register of Electors;
- Provision of a recent utility bill, tax assessment or bank or building society statement containing details of the address (to guard against forged copies’ it is strongly recommended that original documents are examined);
- Checking the telephone directory;
- Record of home visit.
Bodies Corporate
The following documents should normally be obtained from companies:
- Copy of the latest report and accounts (audited where applicable);
- Copy of the company’s Memorandum & Articles of Association;
- Copy of the board resolution to open the relationship and the empowering authority for those who will operate any accounts;
- Copy of the certificate of incorporation/certificate of trade or equivalent.

The following persons (i.e. individuals or legal entities) must also be identified in line with this part of the notes:

All of the directors who will be responsible for the operation of the account/transaction.
All the authorised signatories for the account/transaction.
All holders of powers of attorney to operate the account/transaction.
The beneficial owner(s) of the company

The majority shareholders of the company (if different from the beneficial owners).

Where these are already known to the institution and identification records already accord with the requirements of these notes, there is no need to verify identity again.

LAWYERS PROSECUTED FOR MONEY LAUNDERING OFFENCES

No information available.

Sources

Financial Services Commission

Marcus Simpson, “Gibraltar proposes to rewrite AML guidance notes”, 6 November 2006, www.complinet.com.