Monaco Faces Pressure to Improve Financial Crime Investigation

Monaco has launched a series of reforms aimed at strengthening its anti-money laundering system, which was deemed inadequate by international authorities. The principality’s authorities are working tirelessly to comply with the recommendations made by Moneyval, a Council of Europe body tasked with assessing countries’ efforts against money laundering and terrorist financing.

Reforms to Improve Transparency

The reforms include a transparency exercise that requires company directors to disclose their true ownership. This move is aimed at curbing the use of frontmen in financial transactions. However, some business leaders have expressed frustration with the new requirements, which they see as an invasion of privacy.

Deficiencies in Monaco’s Anti-Money Laundering System

Monaco’s anti-money laundering system was criticized by Moneyval for several “deficiencies,” “weaknesses,” and “shortcomings.” The country’s international profile as a major financial center makes it a prime target for criminal organizations looking to launder their ill-gotten gains. Recent examples include the concealment of Russian assets in Monaco since Russia’s invasion of Ukraine.

Timeline to Comply with International Standards

The government has pledged to implement Moneyval’s recommendations and comply with international standards by 2024, when the Financial Action Task Force (FATF) will make a decision on whether to place Monaco on its “grey list” of jurisdictions subject to enhanced surveillance. Failure to comply could result in a downgrade of Monaco’s reputation as an international financial center.

Consequences of Non-Compliance

The principality is racing against time to demonstrate its commitment to combating financial crime, with many experts predicting that the country’s very existence as a financial hub hangs in the balance.