Monaco Added to FATF’s Gray List Over Money Laundering Concerns
The Financial Action Task Force (FATF) has added Monaco to its list of countries “under increased monitoring” due to concerns about money laundering and terrorist financing. This move is significant, as it joins 20 other countries on the gray list, which is reserved for jurisdictions deemed to have strategic deficiencies in their anti-money laundering efforts.
Background
The FATF made this announcement alongside the addition of Venezuela to the list and the removal of Turkey and Jamaica. According to the global anti-money laundering watchdog, Monaco’s efforts to address money laundering concerns were found to be insufficient despite significant progress achieved since 2022. The country was criticized for its lack of income and wealth taxes, making it a popular destination for wealthy individuals.
Previous Efforts
Monaco had previously implemented policies in response to claims made against several figures close to the head of state, Prince Albert II. However, the FATF deemed these efforts inadequate. In response to being added to the list, Monaco’s government pledged to address the deficiencies and get off the list “in accordance with the planned deadlines.”
Contrasting Developments
In contrast, Turkey was removed from the list after making significant progress in combating money laundering and terrorist financing. A FATF team visited Turkey in May and confirmed that Ankara had taken substantive steps to improve its anti-money laundering policies, citing multiple investigations by authorities to that effect.
Reaction
Turkish officials have welcomed the decision, with Finance Minister Mehmet Simsek declaring “we succeeded” on social media platform X (formerly Twitter). Vice- President Cevdet Yilmaz also hailed the decision, saying it would have extremely positive consequences for the financial sector and economy. The FATF’s president, Raja Kumar, praised Turkey’s efforts, stating that Ankara had made significant progress in combating money laundering and terrorist financing.
Implications
The inclusion of Monaco on the list is expected to have far-reaching implications for the country’s financial system and reputation. With 21 countries currently listed as “high-risk” jurisdictions by the FATF, including North Korea, Monaco will need to take swift action to address its deficiencies and avoid being relegated to the more severe black list.
What’s Next?
Monaco must now work to address its strategic deficiencies in anti-money laundering efforts to get off the gray list. This will require significant changes to its financial system and regulatory framework. The country’s government has pledged to do so, but the timeframe for achieving this is unclear. The FATF will continue to monitor Monaco’s progress closely.
Timeline
- May: FATF team visits Turkey to assess anti-money laundering efforts
- June: FATF announces addition of Monaco to its gray list
- Ongoing: Monaco works to address strategic deficiencies in anti-money laundering efforts
- TBA: FATF reviews Monaco’s progress and decides whether to remove it from the gray list.