Monaco Takes Action to Boost AML Regulations

Avoiding Downgrade as an International Financial Center

In a bid to maintain its status as a reputable international financial center, Monaco has implemented a series of fast-track reforms to address deficiencies identified by Moneyval, a Council of Europe body tasked with assessing anti-money laundering and counter-terrorism financing measures.

Deficiencies Identified by Moneyval

According to Moneyval’s report published in December 2022, Monaco fell short on many evaluation criteria, citing:

• Absence of a proper risk analysis
• Weaknesses in its system

The report highlighted the country’s international profile as a major financial hub, making it a prime target for suspect financial flows.

Implementation of Reforms

As a result, Monaco has been working to implement Moneyval’s recommendations and comply with international standards. A 12-month observation period began following the publication of the report, during which the country must demonstrate efforts to address deficiencies. The decision on whether to place Monaco on the “grey list” will be made in 2024 by the Financial Action Task Force (FATF).

Key Reforms

The reforms aim to increase transparency and strengthen the anti-money laundering system, including:

• Creation of a register of beneficial owners for Monégasque companies
• Increased workload at the Business Development Agency, with many company directors submitting information

Challenges and Determination

While some business leaders have expressed frustration with the new requirements, Monaco’s authorities are determined to pursue implementation of Moneyval’s recommendations and avoid being downgraded as an international financial center.