Ethics and governance in the European Financial centers

The Financial Times has repôrted that Gibraltar would have almost completed its transformation into a conventional financial centre.

“We have been repositioning Gibraltar away from the tax haven, the brass plate, the place where people just hide their money in the hope that nobody else will see it, much more into a financial centre of the onshore European variety,” Mr Caruana, chief minister, told the Financial Times.

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Whereas traditional tax havens are monitored, a new tax haven created by the West African state of Ghana could attract tax dodgers and drug traders seeking to launder money unless safeguards are introduced, warns a report launched a couple of days ago.

The report, Taxation and Development in Ghana, co-funded by Christian Aid Ghana, says the potential detrimental effects of the International Financial Services Centre (IFSC) could be felt across the region. The centre has been set up with the help of Barclays bank.

"The risk of illicit funds finding their way into the offshore financial centre is particularly acute given the extensive cocaine trade in the country and the massive flows from oil that are expected in the near future," says the report. Large oilfields were recently discovered off Ghana’s coast.

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The report is based primarily on work undertaken during a visit to Gibraltar during March 1–17, 2006.
The assessment team comprised Mr. R. Barry Johnston (Head), Mr. Salim M. Darbar, Ms. Tanya Smith,
Ms. Mariela Moreno (all MCM), Mr. Joseph Myers, Mr. Andrews Gors, and Ms. Joy Smallwood (all
LEG), Mr. Peter Hayward (consultant, for banking), Mr. Jorge Mogrovejo (consultant, Superintendency
of Banks and Insurance, Peru, for banking), and Mr. William McCullough (consultant, for insurance).

The main findings of the assessment are:
• Gibraltar has a well-regulated financial sector and the authorities have taken a number of steps to implement recommendations of the last IMF assessment in 2001.
• The assessment found a high standard of compliance with the Basel Core Principles and the Insurance Core Principles.
• While Gibraltar has done a good job of improving its AML/CFT regime to keep abreast of evolving standards, it needs to take a number of steps to update its legal and regulatory regime to reflect the revised FATF 40+9 Recommendations.
• The reputation of Gibraltar as a financial center will depend on maintaining the independence of the Financial Services Commission (FSC).


See the report