Monaco Enforces Stringent KYC Requirements to Combat Financial Crimes

A Step Towards Preventing Money Laundering, Terrorism Financing, and Corruption

In 2009, the Monegasque banking and financial sector implemented stringent “know your customer” (KYC) regulations to prevent money laundering, terrorism financing, and corruption. This legislation, known as Act No. 1362, requires all banks and financial institutions operating in Monaco to conduct thorough customer checks as part of their due diligence process.

Key Requirements

• Customer Identification: Financial institutions must identify customers from the onset of a business relationship and collect all necessary information and documents to establish the characteristics of said relationship.
  • Obtain official and valid identity documents, such as national identity cards, passports or Monegasque residence permits.
  • Retain these documents by the institution.
• Address Verification: Verify customer addresses using alternative documentation, such as:
  • Utility bills
  • Insurance certificates
• Customer Information Gathering:
  • Financial circumstances
  • Reasons for opening an account
  • Origin, composition, and scope of their assets, activities, and economic profile

Ongoing Monitoring and Updates

Once a business relationship has been established, financial institutions are required to:

• Continue monitoring transactions
• Update identification data as necessary
• Ensure that all transactions are consistent with their knowledge of the customer

The legislation aims to prevent the misuse of financial systems for illegal activities and maintain Monaco’s reputation as a trusted and secure financial hub.