Eduardo González
The Spanish Government maintains Gibraltar in its new list of 24 “tax havens”, based on the new international criteria related to the fight against fraud. The permanence of the Rock on the Spanish list comes barely a month after the European Commission included the colony on its own anti-money laundering blacklist. Chief Minister Fabian Picardo has threatened to leave the 2021 Gibraltar Tax Treaty if the Rock is not removed from the Spanish list by next March.
The Ministry of Finance and Public Function made public this week the order determining the countries and territories considered tax havens. The new list of 24 territories is based on the new international concept of “non-cooperative jurisdiction”, contemplated in the Anti-Fraud Act of 2021, and includes new criteria to determine inclusion in the list, such as the effective exchange of tax information. It also identifies territories that facilitate the existence of offshore companies to attract profits without real economic activity, that have low taxation or that are characterized by their opacity or lack of transparency.
The 24 territories that make up the new list are Anguilla, Bahrain, Barbados, Bermuda, Dominica, Fiji, Gibraltar, Guam, Guernsey, Isle of Man, Cayman Islands, Falkland Islands, British Virgin Islands, Mariana Islands, Jersey, Palau, American Samoa, Samoa, Seychelles, Solomon Islands, Trinidad and Tobago, Turks and Caicos Islands, United States Virgin Islands, Vanuatu and Trinidad and Tobago. In addition, fourteen territories leave the list: Brunei, Cook Islands, Grenada, Mauritius, Montserrat, Nauru, Saint Vincent and the Grenadines, Saint Lucia, Jordan, Lebanon, Liechtenstein, Macau, Monaco and Seychelles.
Picardo and Brussels
After learning of the Spanish Government’s decision, Fabian Picardo assured yesterday – in statements to the Gibraltarian television channel GBC – that Spain had committed to remove Gibraltar from the list once two years had passed since the entry into force of the Fiscal Treaty on the Rock, ratified by Madrid and London in March 2021. Therefore, he warned, “if Gibraltar is not removed from Spain’s list of tax havens in keeping with the time frame agreed in the Tax Treaty, Gibraltar will pull out of the treaty altogether”. The Treaty – the first on the Rock since the Utrecht Treaty of 1713 – is contained in the protocol annexed on Gibraltar to the UK’s Withdrawal Agreement from the EU.
Last December 20, the European Commission included Gibraltar in the list of third countries “with strategic deficiencies in their systems for combating money laundering and terrorist financing which pose significant threats to the Union’s financial system”, a list which, although it does not imply the adoption of sanctions, does oblige European banks to reinforce controls on operations involving clients or entities from these third countries.
In its report, the Commission recalled that Gibraltar made, in June 2022, “a high-level political commitment” to work with the Financial Action Task Force (FATF) and the Council of Europe’s Committee of Experts on Money Laundering (MONEYVAL) to strengthen the fight against money laundering. Despite this commitment, he added, “Gibraltar must be considered a third country territory that suffers from strategic deficiencies in its anti-money laundering and counter terrorist financing system.”
Gibraltar’s inclusion on both the Spanish and European lists coincides with the intensification of negotiations between the UK and Brussels on Gibraltar’s future relationship with the EU. In the context of these negotiations, Spain and the Commission have submitted to the British government a “comprehensive proposal” for the creation of a zone of shared prosperity between Gibraltar and the Campo de Gibraltar which includes, among other proposals, the adoption of provisions to combat money laundering. In this regard, Picardo said yesterday that the inclusion of Gibraltar in the Treasury list “has nothing to do with the negotiations” and that, in any case, “the two years” provided by the Tax Treaty for the exit of the Rock from that list have not yet been completed.
