Financial Crime World

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Monaco Takes a Risk-Based Approach to Compliance, FATF Says

In its latest assessment, the Financial Action Task Force (FATF) has praised Monaco for adopting a risk-based approach to compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. The country’s mutual evaluation report, published in 2022, highlights Monaco’s efforts to implement the FATF recommendations.

Assessing Risk and Implementing AML/CFT Framework

According to the report, Monaco has made significant progress in assessing risk and applying a risk-based approach to its AML/CFT framework. The country’s financial intelligence unit has also been effective in collecting and analyzing suspicious transaction reports.

Compliance with FATF Recommendations

Monaco was found to be largely compliant with 14 of the 40 FATF recommendations, including those related to:

  • National cooperation and coordination
  • Money laundering offenses
  • Targeted financial sanctions

Areas for Improvement

However, the report identifies areas where Monaco needs to improve. For instance:

  • The country’s regulatory framework for non-profit organizations requires further development.
  • Monaco’s authorities need to enhance their powers to supervise and regulate financial institutions and designated non-financial businesses and professions (DNFBPs).

Recommendations for Strengthening AML/CFT Regime

The FATF recommends that Monaco continues to strengthen its AML/CFT regime, particularly in areas such as:

  • Customer due diligence
  • Record keeping
  • Internal controls

Additionally, the country should enhance its international cooperation with other countries to combat money laundering and terrorist financing.

Conclusion

Overall, the mutual evaluation report concludes that Monaco has made significant progress in implementing the FATF recommendations. However, there are still areas where it needs to improve. By addressing these weaknesses, Monaco can further strengthen its AML/CFT regime and reduce the risk of financial crime.