Financial Crime World

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MONACO SENTENCES FINANCIAL CRIMES TOUGHLY: GUIDELINES REVEALED

Strengthening Anti-Money Laundering and Financial Crime Prevention Regulations

The Principality of Monaco has taken a firm stance against financial crimes by strengthening its anti-money laundering (AML) and financial crime prevention regulations. This move aims to combat the growing threat of financial fraud and ensure the integrity of the financial sector.

Key Requirements for Banking Services and Financial Activities

According to Act No. 1.362 of August 2009, companies providing banking services and those performing financial activities regulated by Monegasque Act No 1.338 of September 2007 are subject to strict AML duties. These include:

  • Know Your Customer (KYC): Identifying all clients
  • Constant Due Diligence: Conducting thorough examinations on clients and transactions
  • Strong Internal AML Organisation: Establishing robust internal controls and procedures
  • Reporting Suspicious Transactions: Reporting any suspicious activities to the relevant authorities

Scrutiny of Politically Exposed Persons (PEPs)

Sovereign Ordinance No 2.318 of August 2009 defines PEPs as individuals who hold or have held prominent public functions in a foreign country, as well as their spouses, direct ascendants or descendants, and close associates. Financial institutions must exercise heightened due diligence when dealing with PEPs, requiring thorough examinations to establish the origin of their assets and funds.

Identification Requirements

To open an account, individuals must provide valid identification documents bearing their photograph. For legal entities and trusts, identification involves verifying:

  • Corporate Names: Company names and registered offices
  • Lists of Directors: Lists of directors and effective beneficiaries
  • Tax Compliance: Verifying tax compliance through the Common Reporting Standard (CRS)

Consequences of Non-Compliance

Failure to comply with these rules can result in administrative sanctions or criminal penalties, including:

  • Imprisonment: Up to one year in prison for tax offences punishable by more than one year in prison
  • Fines: Pecuniary fines ranging from €5,000 to €100,000
  • Withdrawal of Authorisation: The Minister of State has the power to withdraw authorisation to carry out an activity in Monaco

Liability and Penalties

The liability for failing to comply with money laundering or financial crime rules is severe, with penalties ranging from pecuniary fines to criminal prosecution. It is essential for financial institutions to adhere to these regulations to avoid severe consequences.

Correct as of May 27, 2020