Financial Crime World

Monaco: MONEYVAL Report Highlights Moderate Effectiveness in Money Laundering and Terrorism Financing Prevention

MONEYVAL, the Council of Europe’s anti-money laundering and countering terrorism financing (AML/CFT) body, published a fifth-round evaluation report on the Principality of Monaco on 23 January 2023. The assessment, carried out in March 2022, focused on Member States’ capability to prevent and combat ML/TF.

Assessment Findings

The report revealed several areas where Monaco needs improvements, including:

  1. Risk Understanding:
  2. Supervision:
  3. Investigations:
  4. Sanctions:

Moderate Effectiveness in ML/TF Prevention

Monaco shows a moderate level of effectiveness in various aspects of ML/TF prevention:

  • Understanding of ML/TF risks
  • International cooperation
  • Private sector compliance
  • Use of financial intelligence
  • Implementation of UN targeted financial sanctions

Areas Requiring Improvements

Despite some progress, there are significant gaps in addressing risks related to:

  • Casinos
  • Company services providers
  • Trusts
  • Virtual assets
  • Organised crime
  • High-risk legal persons

Role of the Monegasque Financial Intelligence Unit (SICCFIN)

SICCFIN plays a pivotal role in generating high-quality analyses on suspicious transactions. However, there is a lack of resources, resulting in investigative authorities not fully utilizing the intelligence produced. Most Suspicious Transaction Reports (STRs) originate from banks, while other sectors remain under-reported, even with potential vulnerabilities.

Need for Improvements

Monaco needs to enhance its efforts to identify and prioritize ML cases, improve the seizing, confiscating, and recovering of proceeds of crime, and provide more effective international cooperation. The supervisory system also requires significant improvements, specifically concerning beneficial ownership and conducting ML investigations and prosecutions.

International Cooperation Challenges

Monaco generally collaborates with its counterparts but faces legislative obstacles that hinder their mutual assistance. The country has yet to record any TF convictions, which may not align with its risk profile.

Private Sector Compliance Improvements

The private sector’s AML/CFT understanding and compliance culture need improvement, with limited STR filings from sectors like casinos and jewellers.

Addressing Issues

To address these issues, Monaco must increase its resources, address the complexities of ML cases, improve international cooperation, and create a more stringent and effective regulatory framework and supervisory system.

Sub-issues to Consider

  • Increased resources should be allocated to counteracting risks
  • Enhanced training for authorities on ML/TF risks and investigations
  • Streamlined mutual legal assistance frameworks
  • Strengthened regulatory regime for casinos, company services providers, and trusts
  • Closer cooperation with international partners to share intelligence and best practices
  • Application of more effective and proportionate sanctions for ML/TF offenses
  • Improved data sharing and transparency among authorities to facilitate effective investigations and prosecutions
  • Development of a clear policy on dealing with high-risk legal persons and terrorism financing cases
  • Collaborative efforts between public and private sectors to promote AML/CFT compliance and prevent ML/TF activities