Monaco’s Crackdown on Money Laundering and Financing of Terrorism in Real Estate Sector
Monaco’s dedication to combating financial crimes, including money laundering, financing of terrorism, and corruption, remains a primary focus for the Principality’s government. Since 1993, Monaco has pursued an active policy in this area to ensure the security and transparency of financial transactions, in line with modern banking center standards.
Legal Framework against Money Laundering and Terrorist Financing
The Monagasque legal system against money laundering and terrorist financing has undergone frequent updates to comply with international best practices. Currently, it is based on law no.1.362 of August 3rd, 2009, last amended by law no. 1.503 of December 23rd, 2020. This legislation serves to strengthen regulations for Monegasque companies, aiming for better financial transaction transparency.
SICCFIN: Monaco’s Anti-Money Laundering and Terrorist Financing Unit
To enforce these regulations, Monaco established SICCFIN, the Service d’Information et de Contrôle sur les Circuits Financiers. Similar to the French TRACFIN, SICCFIN collects, analyzes, and processes suspicious transaction reports from professionals subjected to the law, including real estate professionals and agencies.
Key Responsibilities of SICCFIN:
- Monitoring: tracks financial transactions and analyzes reports
- Prevention: identifies and blocks suspicious transactions
- Information and Training: educates financial institutions on regulatory changes and compliance requirements
- International Cooperation: collaborates with international organizations and other countries
Strict Obligations for Monegasque Real Estate Professionals
In terms of real estate transactions, Monegasque professionals must adhere to strict obligations when purchasing, selling, or renting properties:
- Client Due Diligence: Agents and traders are required to perform due diligence on their clients and, if necessary, beneficial owners.
- Required Information: Identification documents and proofs of address are required for individuals. Legal entities and trusts must provide company name, registered office, share capital ownership, directors’ identities, articles of association, extracts from the Trade Register, and documents proving the legal representative’s powers to act on behalf of the company.
- Special Attention: Agents must pay special attention to the legal form, size, capital holders, and management of the companies.
- Additional Documentation: For offshore companies or trusts from countries with tax advantages, additional documentation is required.
Monitoring Potential Risks in Monaco’s Real Estate Sector
Monegasque real estate professionals must maintain a close eye on potential risks, such as:
- High-value transactions
- Complex conditions
- Unusual methods
- Relations with “risky” countries or politically exposed persons (PEPs)
For PEPs, agents must assess the origin of the assets and funds involved in the transaction and apply enhanced monitoring of the business relationship.
Penalties for Non-Compliance
Penalties for failure to comply with these regulations can result in both administrative and criminal sanctions, including:
- Financial penalties
- Temporary or permanent license suspensions
- Imprisonment
Monaco’s Commitment to Maintaining a Transparent Business Environment
Monaco boasts a strong stance against money laundering and terrorist financing while providing an attractive business environment for its economic players. Agencies like Valeri Agency stay informed and compliant with these guidelines, ensuring their clients’ financial transactions are carried out with complete peace of mind.
For more information on Monaco’s regulations, visit SICCFIN’s website: https://www.siccfin.mc/en.