Officials from the Small States and Territories Working Group (STWG) met this week in Gibraltar for the latest meeting to advance their ongoing project on Proliferation Financing (PF), co-led by Gibraltar and the Isle of Man and Terrorist Financing led by Jersey. 

The STWG was established on the margins of MONEYVAL meetings at the Council of Europe by several small jurisdictions with the aim of strengthening cooperation and exchanging expertise in the fight against financial crime. Its first project focused on Terrorist Financing and culminated in a workshop held in Monaco, where participants contributed to the drafting of what became known as the “Monaco Paper”. The document was subsequently endorsed by MONEYVAL in July 2018. 

In mid-2024, the working group agreed to undertake two further projects: Gibraltar and the Isle of Man to jointly lead on Proliferation Financing, and Jersey to update the earlier Terrorist Financing paper. 

The financing of proliferation is the raising, movement, or use of funds and resources to support the proliferation of weapons of mass destruction and represents a growing global challenge. While often linked to larger economies, smaller jurisdictions face distinct vulnerabilities due to their financial systems, global trade connections, and limited institutional resources. These factors can expose small states and territories to exploitation by proliferators through their financial centres, maritime registries, or trade networks. 

The Proliferation Financing paper provides a structured framework for small states and territories to identify, assess, and mitigate PF risks in line with Financial Action Task Force (FATF) Recommendations. It draws on technical expertise, data analysis, and the experiences of members of the STWG, including Andorra, Gibraltar, Guernsey, the Holy See/Vatican City, Isle of Man, Jersey, Liechtenstein, Malta, Monaco, and San Marino. 

Opening the two-day meeting, the Minister for Justice, Nigel Feetham KC MP, welcomed delegates to Gibraltar and commended the collaboration among its members: “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, who oversaw coordination of the PF project said: “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 event featured working sessions focused on finalising the draft PF and TF guidance, with contributions from experts who have supported the working group in refining its outcomes.  

The STWG remains a platform for capacity building, peer learning, and technical cooperation among small MONEYVAL jurisdictions, helping them they remain active contributors to international efforts in the fight against economic crime and threats to global security.