Financial Crime World

Title: Monaco’s Battle Against Money Laundering and Financial Crime: MONEYVAL Report

Subtitle: A comprehensive review of Monaco’s AML/CFT system and compliance with FATF 40 Recommendations

The small but wealthy principality of Monaco has long been under scrutiny due to its role in money laundering and financial crime. In May 2023, MONEYVAL, the Council of Europe’s anti-money laundering and counter-terrorist financing body, published the latest Mutual Evaluation Report (MER) assessing Monaco’s effectiveness in preventing and detecting money laundering, terrorist financing, and other financial crimes.

Monaco’s AML/CFT System: Effective but with Areas for Improvement

The on-site visit from February 21 to March 4, 2022,evaluated Monaco’s compliance with the Financial Action Task Force (FATF) 40 Recommendations. Here’s a look at Monaco’s performance in key areas:

Risk Assessment and Evaluation

Monaco’s risk assessment process was found to be well-constructed; however, improvements are needed in monitoring and assessing country risks, particularly those associated with real estate transactions and Politically Exposed Persons (PEPs).

  • Thorough monitoring and assessment of real estate transactions
  • Enhanced due diligence for PEPs

Customer Due Diligence

Monaco needs to better enforce customer due diligence measures, emphasizing the importance of:

  • Collecting and confirming Beneficial Ownership Information
  • Using technology to monitor transactions

Transparency and Beneficial Ownership

Monaco has made progress in creating a centralized Beneficial Ownership Register, but improvements are needed to ensure accessibility and up-to-date information for the relevant authorities and financial institutions.

  • Enhanced transparency and public access to beneficial ownership information
  • Streamlined information updates

Supervision and Enforcement

Monaco’s supervision and enforcement body, including the Commission de Surveillance du Nord, was found to have effective legal frameworks and powers. However, there is a need for:

  • Improved communication and cooperation between organizations
  • More resources dedicated to investigating suspicious transactions

Technical Competence

Monaco’s commitment to building technical competence was commended; however, more resources are needed to train personnel in these areas.

  • Enhancing financial intelligence and technology capabilities
  • Dedicating resources for personnel training

Implementing Recommendations and Future Assessments

Monaco’s government and financial institutions are expected to implement the MONEYVAL recommendations within a specified timeframe. Follow-up assessments will be conducted to monitor progress and ensure continuous improvement.

Moving Forward: Monaco’s Commitment to Fighting Financial Crimes

Monaco has taken steps to improve its AML/CFT regime, including the creation of a regulatory authority and the establishment of a beneficial ownership register. Additionally, the country hosts the FATF annually, demonstrating its commitment to fighting financial crimes and setting global standards.

The successful implementation of these recommendations will:

  • Strengthen Monaco’s systems
  • Foster confidence in its financial sector
  • Contribute to international efforts to counteract money laundering and financial crimes worldwide

This MONEYVAL report serves as an essential tool for Monaco to further enhance its systems and maintain a transparent, accountable, and crime-free financial sector.