Gibraltar laundering claims resurface

Jack Straw (centre, front) has been labelled a traitor

A letter from the UK government - asking Gibraltar to explain why it has not filed complete financial statistics since 1997 - has been met with renewed claims by Spanish media that the Rock is a haven for money laundering.

"The measure is interpreted in the United Kingdom as concern over 'suspicions that the colony may be a centre for money laundering'," the newspaper La Razon said in an editorial on Tuesday.

The people of Gibraltar feels let down by the UK government

The newspaper described such concern as a "tactful way of referring to something that seems obvious to the rest of the world".

"Gibraltar maintains strict banking secrecy, is a tax haven where VAT is not paid and has an estimated 200 multimillionaires with residence in the territory," the editorial said.

Transparency

The UK Conservative party, which has backed Gibraltar's struggle to fend off moves by Spain to regain control of the Rock, was quick to leap to the territory's defence.

"This seems like yet another attempt by the Government to smear the people of Gibraltar," Shadow Foreign Secretary Michael Ancram told the Daily Telegraph.

But whether Mr Ancram is right or not, one serious problem remains for Gibraltar.

Many in London's Whitehall appear to believe that the Spanish are right about at least some of their money laundering claims, according to the Guardian.

Proof is needed

Consequently, for the UK government - which is in ongoing talks with Spain about the future of the Rock - Gibraltar's failure to publish detailed accounts is embarrassing.

Without statistics to back up claims that the territory is operating within ethical and legal boundaries, it is difficult for the UK government to beat off the kind of broadside attacks delivered by the Spanish press.

"If you have got an offshore tax haven in the way that Gibraltar is, those allegations are made," a government insider told the Financial Times.

"In many ways things have improved, but providing up to date statistics is a necessary part of that improvement."

Explanation requested

Spain's La Razon interpreted the latest intervention by the UK Government as an indication that "London does not intend to remain inactive".

Foreign Secretary Jack Straw wrote to Gibraltar's chief minister, Peter Caruana, in April, to ask why it has failed to publish "basic statistics on its gross domestic product and economic performance" for five years, according to the Guardian.

Mr Straw was also keen to find out why Gibraltar had failed to release official revenue and expenditure figures for more than a year, the newspaper noted.

"Mr Straw's letter to Mr Caruana will not enhance relations between Britain and its colony," the FT noted, adding that "the Foreign Secretary was recently labelled a 'traitor' in Gibraltar over the Government's attempts to facilitate an agreement with Spain over the future sovereignty of the Rock.

Tax haven status

Gibraltar has been campaigning intensely to hamper talks about a joint sovereignty agreement between Spain and the UK.

The campaign has to a large extent focused on non-financial issues.

But those opposed to the talks "are not just patriotic", a report by the Spanish Association of Bank Services Users (Ausbanc) noted.

"[Gibraltar] is afraid of losing its tax haven status and its main source of economic resources," the association said.