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Monaco Cracks Down on Financial Crime with Data Analysis Reforms
In a bid to avoid being listed as a country that fails to combat money laundering, Monaco has implemented a series of fast-track reforms aimed at strengthening its anti-money laundering system. The principality’s authorities are working tirelessly to ensure that it does not join the “grey list” of countries considered deficient in the fight against financial crime.
Key Reforms
- The Register of Beneficial Owners of Monégasque companies has been experiencing an unprecedented surge in activity since its introduction.
- Company directors have been flocking to the Business Development Agency’s small office at the heart of Monaco to list the true owners of their companies behind possible frontmen.
Why Transparency Matters
While this transparency exercise may seem tedious for some, it is a crucial step towards preventing money laundering and other financial crimes. Monaco’s authorities are determined to pursue the implementation of Moneyval’s recommendations in order to comply with the most demanding international standards.
The Warning Shot from Moneyval
The warning shot came from Moneyval, a Council of Europe body tasked with assessing the level of compliance and effectiveness of anti-money laundering and counter-terrorist financing measures. In its assessment report on Monaco, published in December 2022, Moneyval pointed out several deficiencies, weaknesses, and shortcomings, including:
- The absence of a proper risk analysis
- Lack of transparency in beneficial ownership
- Weaknesses in the implementation of anti-money laundering regulations
Monaco’s International Profile
Monaco’s international profile as an attractive destination for financial services makes it a prime target for suspect financial flows. The principality has been criticized for its lack of effectiveness in preventing money laundering and other financial crimes, particularly:
- Tax fraud
- Embezzlement
- Corruption
Consequences of Non-Compliance
The consequences of not complying with international standards are severe, with Monaco facing the possibility of being downgraded to the same category as countries like:
- United Arab Emirates
- Gibraltar
- Bulgaria
The Financial Action Task Force (FATF) will make a decision on Monaco’s compliance in 2024, following a 12-month observation period.
Conclusion
In the meantime, Monaco’s authorities are working diligently to address the deficiencies highlighted by Moneyval and ensure that the principality remains an attractive destination for legitimate financial activity while maintaining its reputation as a key player in the global fight against financial crime.