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FATF Recommendations 2022 in Monaco: A Mixed Bag of Compliance

Monaco’s latest mutual evaluation by the Financial Action Task Force (FATF) has revealed a mixed picture of compliance with international anti-money laundering and counter-terrorism financing standards. The country received ratings ranging from compliant to non-compliant across various recommendations.

Assessing Risk and Applying a Risk-Based Approach

  • Monaco was found to be largely compliant in assessing risk and applying a risk-based approach, demonstrating its ability to identify and mitigate high-risk areas.
  • This is reflected in the LC (largely compliant) rating received by the country.

National Cooperation and Coordination

  • The principality also scored well on national cooperation and coordination, receiving an LC rating, indicating effective collaboration between government agencies and financial institutions.

Money Laundering Offence

  • However, Monaco fell short in terms of making money laundering a criminal offence, earning a partial compliance (PC) rating. This recommendation has been outstanding since 2019.
  • The country received a PC rating for confiscation and provisional measures, indicating some progress but still requiring improvement.

Other Areas of Compliance

  • Terrorist Financing Offence: Monaco was found to be compliant (C) in making terrorist financing a criminal offence, demonstrating its commitment to combating terrorism.
  • Targeted Financial Sanctions: The principality scored well on targeted financial sanctions related to terrorism and terrorist financing, earning a C rating. It also received a PC rating for sanctions related to proliferation.
  • Financial Institution Secrecy Laws: Monaco received an LC rating for financial institution secrecy laws, indicating that it has implemented effective measures to prevent secrecy.
  • Customer Due Diligence: Monaco scored well on customer due diligence, earning a C rating. It also received an LC rating for record keeping and political exposure persons.

Areas Requiring Improvement

  • Non-Profit Organisations: Monaco was found to be non-compliant (NC) in terms of regulating non-profit organisations, citing weaknesses in supervision and reporting requirements.
  • Money or Value Transfer Services: Monaco received a PC rating for money or value transfer services, indicating some progress but still requiring improvement.
  • New Technologies: The country earned a C rating for its handling of new technologies, such as digital currencies and virtual assets.
  • Higher-Risk Countries: Monaco was found to be non-compliant in terms of reporting suspicious transactions related to higher-risk countries, receiving a PC rating.

International Cooperation

  • Extradition: Monaco earned an LC rating for extradition, indicating effective cooperation with other countries.
  • Mutual Legal Assistance: The country received a C rating for mutual legal assistance, indicating effective measures to combat money laundering and terrorist financing.
  • Other Forms of International Cooperation: Monaco was found to be non-compliant in terms of other forms of international cooperation, receiving a PC rating.

Statistics

  • Monaco received an LC rating for statistics, indicating effective measures to prevent money laundering and terrorist financing.