Monaco Introduces New Laws to Combat Financial Fraud
Monaco has taken a significant step to strengthen its anti-money laundering policies by introducing new laws and regulations aimed at combating financial fraud. The government has enacted two laws, No 1.449 and 1.550, in July and August of last year, respectively, which have created new duties for companies, foundations, and associations.
New Responsibilities for Actors
The new legislation requires “actors” responsible for collecting, transmitting, and retaining essential information on legal entities and individuals, including:
- Beneficial owners
- Shareholders
- Partners
This information must be retained for a period of ten years. The role of the “Basic Information Officer” has also been created, who may collect information on an entity’s beneficial owners and may be an individual or a legal entity appointed internally or from outside.
Increased Accountability for Senior Executives
Senior executives and board members are now subject to increased accountability and must demonstrate evidence of fulfilling various duties regarding:
- Basic information
- Declaration of beneficial owners
Professionals such as lawyers, notaries, Multi Family Offices, and chartered accountants have been designated as responsible for collecting this information.
Implications for Liability and Governance
The introduction of these new duties has implications for liability and governance, including:
- Professional liability
- Civil liability
- Administrative liability
- Criminal liability
Liability can include responsibilities such as verification, sanction, control of registers, and disputes. Insurance coverage is expected to expand in the future.
New Duties for Authorities
The Monegasque Financial Security Authority, Business Development Agency, and Ministry of Interior have been entrusted with new duties, including:
- Imposing sanctions up to EUR 100,000 for non-compliance
Existing actors, such as Compliance Officers and liquidators of commercial or civil companies, have seen an increase in their responsibilities and may face criminal sanctions if they fail to properly retain information.
Creation, Change, and Cessation of Activities
The introduction of these new regulations has set in motion a process of responsibility regarding the creation, change, and cessation of activities in Monaco. The internal organisation of a company, its control, and primary governance have become essential criteria for setting up an activity in the Principality, especially when subject to anti-money laundering provisions.
Legitimate Interest
The legitimate interest of an organization must be proven, and major future developments will be detailed in implementing legislation.
By introducing these new regulations, Monaco is taking a significant step towards combating financial fraud and ensuring the integrity of its financial system.