Monaco Under Scrutiny: Moneyval Report Reveals Concerns over AML/CFT Measures
Subtitle: Anticipated Increased Monitoring of Principality following Moneyval Evaluation
Monaco, the glamorous Mediterranean microstate known for its luxury lifestyle and tax havens, is under the spotlight once again following a report by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval). In its latest Fifth Evaluation Report, published on January 23, 2023, Moneyval expressed concerns over the Principality of Monaco’s effectiveness in implementing and enforcing regulations to prevent money laundering and terrorism financing.
Concerns over Monaco’s AML/CFT Measures
According to the report, Moneyval found several deficiencies in Monaco’s legislative framework, particularly in the real estate sector. These concerns include:
- Lack of proper customer due diligence procedures
- Outdated legislation
- Need for better coordination between authorities
Role of Real Estate Transactions in Money Laundering and Terrorism Financing
The report further emphasized the role of real estate transactions in the financing of terrorism and money laundering and encouraged Monaco to enhance its regulatory framework to prevent such activities. Monaco was urged to implement the Financial Action Task Force’s (FATF) recommendations and improve risk assessment and international cooperation.
Impact and Response
With these issues raised, Monaco is expected to face increased monitoring from international financial watchdogs, including Moneyval and the FATF. The Prince’s government has announced that it is taking the report seriously and plans to address the recommendations promptly.
Ongoing Concerns
Anti-money laundering and terrorism financing measures have been a topic of ongoing concern in Monaco. The principality is known for its robust banking secrecy laws, which have long fueled debates about the potential for financial crimes. The recent report adds to the growing international pressure on Monaco to modernize its financial regulations and join the global efforts to combat money laundering and terrorism financing.
Historical Background
Monaco’s reputation as a tax haven and a haven for secrecy has long been a subject of criticism. In the past, Monaco’s strict banking secrecy rules led to it being implicated in several money laundering and tax evasion scandals.
Future Perspectives
As Monaco faces increased scrutiny, it remains to be seen how the principality will respond to the Moneyval report and its impact on its ongoing efforts to strengthen its financial framework. Stay tuned for updates on Monaco’s response and the potential implications for its economy and global standing.
Fifth Evaluation Report
The Fifth Evaluation Report (MONE-CO) is a comprehensive assessment of Monaco’s measures to prevent and combat money laundering and terrorism financing according to the recommendations of the Financial Action Task Force (FATF).
Concerns over Monaco’s AML/CFT Measures
Moneyval identified several deficiencies in Monaco’s legislative framework in the area of customer due diligence. The report states that Monaco’s Customer Due Diligence Act is outdated and lacks provisions for ongoing customer due diligence.
Recommendations
Moneyval made the following recommendations to Monaco:
- Enhance customer due diligence procedures.
- Update legislative and regulatory framework.
- Improve communication and coordination between authorities.
- Strengthen international cooperation in the fight against money laundering and terrorism financing.
- Increase the use of technology and automation to prevent financial crimes.
Risk Assessment
Monaco was also urged to consider the risk of money laundering and terrorism financing in the context of its financial sector, particularly in relation to the real estate sector, and to develop a comprehensive risk assessment and mitigation strategy.
International Cooperation
The report stressed the importance of international cooperation in the fight against money laundering and terrorism financing, and encouraged Monaco to establish partnerships with other jurisdictions and financial intelligence units to share information and best practices.