European Parliament objects to removal of UAE and Gibraltar from ‘high-risk’ list
The European Parliament rejected, on 23 April, the European Commission’s proposal to remove the United Arab Emirates (UAE), Gibraltar and other countries from its list of ‘high-risk third country jurisdictions’ with strategic deficiencies in their anti-money laundering and combating the terrorist financing regimes (AML/CFT).
The Commission had proposed on 14 March to remove Barbados, Gibraltar, Panama, Uganda and the UAE from its list. It followed the Financial Action Task Force’s (FATF) decision to remove these five jurisdictions from its own ‘grey list’ in February because it was satisfied that they had implemented their respective agreed action plans.
The Parliament’s motion for resolution claimed, however, that there was “important and recent evidence suggesting that the UAE, Gibraltar and Panama lack efforts in addressing, or even facilitate the evasion of, sanctions imposed on Russia, including targeted financial sanctions on individuals, as a response to the Russian war of aggression against Ukraine.”
The motion concluded by saying that while improvements in the AML/CFT framework in the UAE were undeniable and very welcome, taking the elements outlined above into consideration, a delisting of the UAE from the EU’s list of high-risk third countries could not properly ensure the protection of the integrity of the EU financial system, given the high exposure of the internal market to the UAE as a financial and trading hub.
It called for “a more thorough assessment of the risks and effective reforms carried out by the UAE is required before delisting the country” and instructed its President to forward the resolution to the Commission and notify it that the delegated regulation could not enter into force. It further called on the Commission to submit a new delegated act that would take account of its concerns.
US, UK and EU officials were visiting the UAE when the vote was taken as part of a wider coordinated effort to prevent sanctioned goods from reaching Russia. They had a series of separate meetings to share detailed trade information on its exports to Russia and on the re-export of so-called dual-use goods that have both civilian and military purposes.
While the European Parliament’s primary issues are with the UAE, the process requires that the proposed regulation be rejected in its entirety, and the Commission is now required to present a new proposed regulation.
The Gibraltar government noted its disappointment with the decision. It said that while the FATF’s decision had been made after a period of intense technical scrutiny and meticulous evaluation, the European Parliament’s had not. Instead, it was a position poisoned by politics, promulgated by hostile actors within the European Parliament.
“Nonetheless, the government remains seriously concerned with the one reference to Gibraltar in the substantive part of the objection which suggests that Gibraltar has facilitated the evasion of sanctions imposed on Russia. This baseless, totally unsubstantiated and gratuitous accusation is, in itself, reflective of the value which should be attached to the European Parliament’s decision,” said a government statement.
“The government will not allow Gibraltar’s good name to be remotely associated with efforts to support Russia’s war of aggression against Ukraine and it will therefore be raising this claim at the highest political level”.
The Gibraltar government has called on the European Commission to adopt a new decision removing Gibraltar from the EU’s list and to do so promptly. None of these developments have any bearing on the FATF’s reasoned and considered position on Gibraltar, meaning that Gibraltar will remain off the FATF’s list.
