The Proceeds of Crime (Miscellaneous Amendment) Act 2021 came into force on 9th February 2021 and amended a number of pieces of Gibraltar legislation, most prominently the Proceeds of Crime Act 2015 (POCA).
Some of the key changes to POCA relate to the following:
- the definition of "beneficial owner" has been clarified;
- there is a new definition for "Listed Entity";
- the list of "relevant financial businesses" (RFB) has been expanded;
- the customer due diligence (CDD) measures that RFBs must apply have been amended to clarify what the legal and regulatory requirements are;
- RFBs continue to be required to review their existing CDD documentation on a risk-based approach but an amendment also requires "materiality" to be taken into consideration;
- RFBs are now permitted to stop conducting CDD if this risks tipping off the customer;
- legislative requirements for ongoing monitoring of a customer's transactions have been expanded;
- it has been clarified that when an RFB conducts its own risk assessment, it must take into account the risks identified in the National Risk Assessment;
- the automatic treatment as low risk that was afforded previously to EEA states or institutions based in the EU has been removed;
- RFBs should establish the source of funds/wealth involved in a business relationship even for clients already on-boarded, and not just for new customers;
- where a RFB relies on a third party for CDD information, the RFB is no longer permitted to assume that that person is regulated; this has to be positively confirmed by the RFB;
- the policies and procedures RFBs are required to establish and maintain under s.26(1) have not changed, however these are required to be proportionate to the nature and size of the RFB;
- S.26(1A) also requires that as part of this monitoring, RFBs have to undertake an independent audit function for the purposes of testing the policies, controls and procedures; and
- a new s.26(2)(e) requires RFBs to have polices and procedures that allow for full and speedy responses to requests from the GFIU, a law enforcement agency or a supervisory authority.
Notably, the Terrorism Act 2018 has also been amended to include the offence of Proliferation Financing (PF) which refers to:
"the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual-use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations (FATF working definition of PF based on UNSCR 1540)."
The Gibraltar National Coordinator for Anti-Money Laundering and the Combatting of Terrorist Financing has published a useful newsletter covering the key legislative amendments introduced by the Proceeds of Crime (Miscellaneous Amendment) Act 2021, which you can download below.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.