The Financial Stability Forum (FSF) have published a list of jurisdictions with significant offshore financial activities and catergorised these into three groups.
The Gibraltar Government is surprised at the classification of Gibraltar within Group 2 which is defined as "jurisdictions….. generally perceived as having legal infrastructures and supervisory practices; and or a level of resources devoted to supervision and co-operation relative to the size of their financial activities and/or a level of co-operation that are largely of a higher quality then Group III but lower than Group I" and is of the view that Gibraltar should have been placed in Group 1.
By its own admission the FSF process is subjective and impressionistic. It is based on answers to questionnaires and subjective opinions of other jurisdictions. No reasons have been given to jurisdictions or discussions entertained with jurisdictions before the gradings were announced.
The Government believes this process is fundamentally flawed and fails to meet the principle of natural justice.
As indicated by the FSF the published gradings do not constitute and should not be taken to be an assessment of jurisdictions. Indeed the FSF recommends formal assessment of jurisdictions.
The Government would welcome a formal assessment of Gibraltar and is confident that the Gibraltar finance centre will be recognised as having the highest international standards. Any assessment of jurisdictions stemming from the FSF or any other review must be conducted in a fair, transparent manner and in accordance with the principles of natural justice.
The quality of supervision of Gibraltar’s finance centre has been assessed externally by the United Kingdom authorities and Gibraltar has been held out as a benchmark jurisdiction by the United Kingdom Government. Indeed when conducting his review of the Crown Dependencies, Andrew Edwards used Gibraltar as a comparator jurisdiction.
In fact, Gibraltar is within the EU and therefore required to meet and does meet all EU standards;
- The Financial Services Commission (FSC) is required by Gibraltar law to establish and maintain standards which match those required by legislation and supervisory practice governing the provision of financial services within the UK;
- The FSC is subjected to regular reviews by UK authorities and these have determined that Gibraltar matches UK standards in insurance and banking supervision;
- No other jurisdiction within the UK’s sphere of influence has been subjected to such reviews or has the requirement to match UK standards by law;
- The FSC has all the normal statutory gateways to assist other regulators and has provided assistance to such regulators or supervisors regularly;
- Our legislation to counter money laundering is on an "all crimes" basis. These match the standards and procedures adopted in the UK;
- Gibraltar regulates company management and trust services providers (other comparable jurisdictions are only now moving towards regulation of these sectors and many so-called "onshore" jurisdictions have no such arrangements in place).
Gibraltar wholly endorses the global efforts to create financial stability and raise international standards. The Gibraltar Government is committed to meet the highest globally applied standards.
Had the FSF conducted its own objective assessment, rather than relied on "perceptions" it would have recognised Gibraltar as part of the leading group of well regulated finance centres.
The Gibraltar Government intends to raise this matter with the FSF and request reasons for Gibraltar’s grading. The Government will continue in its policy of co-operation with international initiatives and seeks to ensure that these are conducted in a fair and transparent manner and apply common standards to all jurisdictions which conduct significant non-resident financial business.