Monaco Fights Money Laundering and Terror Financing, but Efforts Fall Short
Introduction
In an effort to combat money laundering (ML) and terrorist financing (TF), Monaco has taken steps to identify risks and develop an action plan. However, a recent assessment by international authorities has revealed that the principality still faces significant challenges in effectively addressing these threats.
National Risk Assessment
According to the assessment, Monaco’s national risk assessment (NRA) identified several sectors as high-risk areas for ML/TF, including:
- Casinos
- Trusts
- Virtual assets
- External threats
However, further analysis is needed to fully understand the risks and develop targeted measures to mitigate them.
Action Plan
The authorities have developed an action plan following the NRA, but it lacks specific measures to address the identified risks. Additionally, the plan has not been quantified, prioritized, or implemented, leaving room for improvement.
Cooperation among Authorities
Cooperation between authorities is crucial in the fight against ML/TF. Monaco has established several liaison committees and contact groups, including a new coordination committee set up recently to improve communication and cooperation among stakeholders.
Financial Intelligence
Financial intelligence plays a vital role in combating ML. While Monaco’s SICCFIN produces high-quality operational analyses, investigators have limited access to financial intelligence, which often arrives with delays. Suspicious transaction reports (STRs) are mainly submitted by the financial sector, but there is still room for improvement in terms of quality and timeliness.
Investigations
Investigations into ML cases are plagued by significant delays, partly due to difficulties in obtaining mutual legal assistance from other countries. The lack of written policies and procedures for prioritizing investigations based on risks also hinders progress.
Confiscation Orders
Confiscation orders are rare in Monaco, with few convictions leading to asset recovery. The country lacks a strategy or official policy on confiscation, and powers of confiscation are limited. Provisional measures are implemented only modestly due to difficulties in identifying and locating assets.
Progress and Challenges
Despite these challenges, Monaco has made efforts to improve its anti-money laundering and counter-terrorism financing regime. A proactive approach towards identifying undeclared cross-border transportation of cash and bearer instruments seems effective, but cooperation with French counterparts is still developing.
Conclusion
The assessment concludes that while Monaco has taken steps to address ML/TF risks, more needs to be done to strengthen its regime and effectively combat these threats. International authorities will continue to monitor Monaco’s progress in this area.