Monaco Added to FATF’s Grey List Despite Progress
The Financial Action Task Force (FATF) has added Monaco to its grey list of countries with “strategic deficiencies” in countering money laundering and terrorist financing, despite the principality having taken a series of actions to address concerns.
Background
The FATF is a Paris-based organization that monitors efforts by over 200 countries and jurisdictions to prevent money laundering and the financing of terrorism. The grey list designation is considered a setback for Monaco’s efforts to maintain its reputation as a financial hub. Long known as a playground for the rich and famous, Monaco attracts wealthy residents due to its extremely favorable tax regime.
FATF’s Concerns
Despite significant progress achieved since 2022, FATF President Raja Kumar said that Monaco needs to address strategic deficiencies. The FATF found that Monaco had not taken sufficient efforts to:
- Stop laundering money from fraud committed abroad
- Move aggressively enough to seize criminal assets
- Implement sufficient money-laundering penalties
- Provide investigators with sufficient resources
Monaco’s Response
Monaco’s government has pledged to implement the latest FATF recommendations by the planned deadlines. The principality has adopted nine laws to toughen its rules and boost its anti-money laundering body, the AMSF. However, local sources have said it has been difficult to apply the measures immediately due to a lack of qualified staff.
Previous Efforts
Monaco was briefly on an OECD blacklist of financial centres in 2009, prompting it to undertake a series of transparency measures and cooperation agreements to help crack down on tax evasion. The principality has also been shaken since the end of 2021 by anonymous denunciations orchestrated by a website “Les Dossiers du Rocher” (“The Rock Files”), which accused several figures close to Prince Albert of being involved in a money laundering scheme based on corruption in property deals.
Removal from Grey List
In related news, Turkey was removed from the grey list after eliminating the identified deficiencies in its efforts to prevent money laundering and the financing of terrorism. Jamaica was also removed from the list after taking similar measures. A total of 21 nations are currently on the grey list, including Mali, Vietnam, and Yemen.
FATF’s Black List
The FATF has a “black list” of countries considered high-risk jurisdictions.