MONACO: Know Your Customer (KYC) Requirements for Financial Institutions
The Principality of Monaco has implemented strict laws and regulations governing the requirements for financial institutions to obtain documentation confirming the identity of their account holders, known as Know Your Customer (KYC) requirements. These regulations are enforced by the Service d’Information et de Contrôle sur les Circuits Financiers (SICCFIN) and the Minister of State.
Background
According to Article 10-12 of Law n° 1.162 of July 7, 1993, Article 1 of Sovereign order n° 11.160 of January 24, 1994, and Recommendations of the Association Monégasque des Banques (AMB), financial institutions operating in Monaco are required to comply with these regulations.
Consequences of Non-Compliance
Failure to obtain, maintain, and evaluate documentation obtained under these laws and regulations can result in penalties such as:
- Warning
- Reprimand
- Suspension of activities
- Revocation of banking activity
- Fines up to FF 6,000,000 or imprisonment for up to five years
Documentary Evidence Requirements
To comply with these regulations, financial institutions are required to use specific documentary evidence to confirm the identity of account holders. For natural persons, this includes:
- Passport
- National identification card
- Monaco resident’s card
For legal persons, one of the following documents is acceptable:
- Copies of the certificate of incorporation
- Articles of association
- Organizational documents
- Extracts from public registers
Procedures for Confirming Identity
Financial institutions are required to follow specific procedures to confirm the identity of account holders who do not open accounts in person or provide new documentation for existing accounts. This includes:
- Obtaining a copy that is an exact reproduction of the specific documentary evidence listed above by mail or otherwise from another person subject to know-your-customer rules approved by the IRS, provided that the laws and regulations permit QI to rely on the other person to identify the account holder.
Importance of Compliance
The Monaco government has made it clear that financial institutions operating in the country must prioritize compliance with KYC requirements to prevent money laundering and maintain transparency. With penalties for non-compliance ranging from fines to imprisonment, financial institutions would be wise to carefully review and adhere to these regulations to avoid any legal issues.
By prioritizing compliance with KYC requirements, financial institutions can ensure a safe and secure environment for their customers while also maintaining the trust and confidence of regulators and law enforcement agencies.