Small states and territories meet in Gibraltar to tackle proliferation and terrorist financing

Officials from the Small States and Territories Working Group (STWG) gathered in Gibraltar this week to progress their joint initiatives on combating Proliferation Financing (PF) and Terrorist Financing (TF). The projects are being jointly led by Gibraltar and the Isle of Man on PF, and by Jersey on TF.

The STWG was formed on the margins of MONEYVAL meetings at the Council of Europe to enhance cooperation and share expertise among smaller jurisdictions in the global fight against financial crime. Its first major achievement was the 'Monaco Paper' on Terrorist Financing, produced after a workshop in Monaco and endorsed by MONEYVAL in July 2018.

In 2024, the group agreed to expand its work to address two critical areas: updating the original Terrorist Financing guidance and developing a new framework to counter Proliferation Financing - the funding or movement of resources used to support the spread of weapons of mass destruction.

Smaller jurisdictions, the group noted, face unique challenges due to their open financial systems, extensive trade links, and limited institutional capacity, all of which can make them vulnerable to exploitation by proliferators.

The new Proliferation Financing guidance aims to provide a structured approach for identifying and mitigating such risks in line with the Financial Action Task Force (FATF) Recommendations. It draws on the expertise of participating jurisdictions including Andorra, Gibraltar, Guernsey, the Holy See/Vatican City, Isle of Man, Jersey, Liechtenstein, Malta, Monaco and San Marino.

Opening the two-day meeting, Gibraltar’s Minister for Justice, Nigel Feetham, welcomed delegates and praised their collaborative efforts:

“The Small States and Territories Working Group is an example of how smaller jurisdictions, when working together, can deliver high-quality contributions to the global AML/CFT/CPF framework. I am delighted that, despite our size, we have been able to draw on local talent and expertise from the GFIU and GFSC in such a specialised field. Gibraltar is proud to support this important initiative, which not only strengthens our understanding of risks to our finance centre but also contributes to our efforts in combatting TF and PF.”

Edgar Lopez, Director of the Gibraltar Financial Intelligence Unit (GFIU) and a recognised specialist in proliferation financing, coordinated the PF project. He highlighted the significance of the initiative:

“This has been a team effort on a very complex topic in an increasingly complex world. Understanding proliferation financing risks is not easy, but by combining our knowledge and experience, we’ve created something that others can build upon. We now have a clearer understanding not only of Gibraltar’s exposure, but also of the wider regional and international risks."

The sessions in Gibraltar focused on finalising the draft PF and TF guidance papers, incorporating expert input to refine their findings.

The STWG continues to serve as a key platform for peer learning, technical collaboration, and capacity building among small MONEYVAL jurisdictions, ensuring they remain active contributors to global efforts against financial crime and threats to international security.