Spain to ask for Gibraltar to be placed on the black list of tax havens
Spain is to ask the Organization for Cooperation and Economic Development (OCDE) to revise Gibraltar’s status as a tax haven and for it to be placed on a ‘black list’ for its lack of cooperation with the Spanish authorities. According to the Spanish Tax Office, Gibraltar continues to be an ‘opaque, inaccessible and impenetrable’ place. A spokesperson for the tax office said that any information they had received from the Gibraltan authorities had been ‘insufficient and of very little use’ and that their inquiries had come up against a brick wall. The Spanish authorities believe that other tax havens like Jersey, some parts of the Caribbean and Andorra have provided more information to help combat money laundering.
The 6.5 squared kilometres that make up the territory of Gibraltar constitutes a international financial centre much more important than the Gibraltan authorities would like to admit.
The local economy of this British naval base has been moving towards the financial sector in recent years. In fact, according to El Pais, based in Gibraltar there are 19 banks and 10 branches of international companies. There are also 17 insurance companies as well as more than 30 investment companies or financial brokers. There are 15 foreign exchange offices, up to 28,000 active associations and an undetermined number of non registered foundations and trusts. According to the same article, this small area of land also boasts 115 lawyers and 28law firms whose activities are outside the supervision of any financial authority.
Although the financial activities of tax havens normally have a global character experts, such as the International Monetary Fund have continued to suggest that Gibraltar is an individual case where, along with other areas such as the Costa del Sol or the north of Africa, there appear to be activities linked to money laundering, corruption and drug trafficking.
Furthermore, in recent years Gibraltar has become the headquarters for many international internet gambling companies, something which also worries the authorities involved in combating money laundering.
Gibraltar has committed itself to accommodating its legislation to EU norms and to adopting the recommendations made by GAFI (the International Financial Action group), the principal institution in the struggle against money laundering. Some legal reforms will take effect from 2010. Gibraltar until now has been considered as a cooperative tax haven compared to Andorra, Liberia, Lichtenstein, Marshall Isles and Mónaco which are all considered as non cooperative.
According to Juan Hernández Viñuelas author of a book about tax havens quoted by El Pais, Gibraltar has been breaking agreements since 1997. Hernandez states that ‘Gibraltar has become a very active financial centre with a very special status within the EU’. In addition, he says that it is governed by an oligarchy, that is to say, a very small group of powerful people.