Financial Crime World

Politically Exposed Persons (PEPs) Face Stricter Due Diligence Measures in Monaco

The Principality of Monaco has introduced stricter due diligence measures for Politically Exposed Persons (PEPs) to strengthen its efforts against money laundering and terrorist financing.

Definition of PEPs

Under the new rules, PEPs are defined as individuals who hold or have held significant public functions, regardless of their nationality. This includes:

  • Heads of state
  • Government officials
  • Parliament members
  • Judges
  • Political party leaders
  • Senior officials of international organizations

In addition to these individuals, the spouses, direct ascendants, and descendants of PEPs will also be considered PEPs.

Enhanced Due Diligence Measures

Professionals must conduct enhanced due diligence on PEPs, including:

  • Verifying their identity, address, occupation, business relationships, and transactions
  • Conducting a thorough investigation into the PEP’s background, including their source of wealth and income, as well as the origin of their assets
  • Obtaining information on their business relationships and transactions

Ongoing Monitoring

PEPs will be monitored closely on an ongoing basis using a combination of automated checks and manual reviews. Any discrepancies or suspicious activity must be reported immediately to the relevant authorities.

Consequences for Non-Compliance

Non-compliance with AML/CTF regulations can result in:

  • Criminal charges, including imprisonment
  • Administrative sanctions such as fines and suspension of business license

What You Need to Know

  • PEPs are defined as individuals who hold or have held significant public functions, regardless of their nationality.
  • PEPs include heads of state, government officials, parliament members, judges, political party leaders, and senior officials of international organizations.
  • Spouses, direct ascendants, and descendants of PEPs will also be considered PEPs.
  • Professionals must conduct enhanced due diligence on PEPs, including verifying their identity, address, occupation, business relationships, and transactions.
  • PEPs will be monitored closely on an ongoing basis using a combination of automated checks and manual reviews.
  • Non-compliance with AML/CTF regulations can result in criminal charges, including imprisonment, as well as administrative sanctions such as fines and suspension of business license.

Conclusion

Monaco’s new regulations on PEPs demonstrate the country’s commitment to maintaining its reputation as a safe and reliable financial center. The enhanced due diligence measures will help professionals to identify potential risks and prevent money laundering and terrorist financing. As the global fight against financial crime continues, Monaco’s efforts are an important step towards ensuring a safer and more secure financial environment for all stakeholders.