MercoPress. South Atlantic News Agency

Spanish real estate boom funded by black money claims US

The United States State Department 2008 International Narcotics Control Strategy Report makes a link and describes Spain as the “grand European centre for money laundering”, according to the Gibraltar Chronicle.

The latest US report claims that black money from drug trafficking in Spain has been feeding the Spanish real estate boom which has been seen along the coast. The '2008 International Narcotics Control Strategy Report' dedicates a whole chapter to Spain where it claims that there are local town halls which have preferred to ignore the origin of the money. It claims that given the high profitability of the construction sector over recent years, many coastal municipalities have turned their backs to the illegality of diverse construction projects in their towns. They note that the Prosecutor's Office has acted in the face of this reality and note that in Málaga province alone more than 200 cases of corruption linked to construction have been investigated. The report calculates that up to 30% of the 500 euros notes in circulation in Europe can be found in Spain, linked directly to the purchase of property for money laundering purposes. It describes Spain as the "grand European centre for money laundering", as well as the grand door for the entry of illegal narcotics. The report describes Spain as being the leading country for the use of illegal drugs in Europe, and says that one in five cocaine users in Europe lives in Spain where 3% of the population take the drug on a regular basis. It does note however that the Spanish authorities are acting firmly against the traffickers and that there is a high level of cooperation and 'excellent relations' with the United States drug fighting agency, DEA. On Gibraltar the report notes that it is an overseas territory of the United Kingdom: "A November 2006 referendum resulted in constitutional reforms transferring powers exercised by the U.K. government to Gibraltar. Gibraltar is a significant international financial centre with strong ties to London, the Channel Islands, Israel, Cyprus, and other financial centres. Located at the southern tip of Spain, near the north coast of Africa, Gibraltar is adjacent to known drug-trafficking and human smuggling routes. It is also a retail banking centre for northern European expatriates with property in southern Spain. All of these factors reportedly contribute to money laundering and terrorist financing vulnerabilities in Gibraltar" it says. It also observes that the Rock was one of the first jurisdictions to introduce and implement money laundering legislation that covered all crimes. The IMF rated Gibraltar "largely compliant" or "better" with 32 of the Financial Action Task Force's (FATF) 40 Recommendations and nine Special Recommendations, it notes. "The Government of Gibraltar should continue its efforts to implement a comprehensive anti-money laundering and counter-terrorist financing (AML/CTF) regime. The criminal laws on money laundering should be consolidated, and powers presently available only in drug-related money laundering cases should be extended to money laundering cases involving the proceeds of other crimes. The GOG should introduce legislative provisions to its asset seizure and confiscation regime allowing authorities to confiscate assets, including cash, even without a link to the original criminal proceeds. Gibraltar needs to conduct risk assessment of those designated non-financial businesses and professions that are unsupervised and determine and extend the necessary authority to conduct AML/CTF compliance examinations of these entities," it says