Monaco’s Economy: A Balance of Strengths and Weaknesses

As a renowned financial hub, Monaco faces unique challenges in maintaining the integrity of its economy. While it is known for its safety and security, it also has a low risk of terrorism and money laundering.

Money Laundering Challenges

According to recent assessments, the main predicate offence in money laundering cases is property fraud, followed by corruption and trafficking in influence. The authorities have made efforts to improve the effectiveness of asset recovery, but there are still significant challenges to overcome.

Limited Powers and Delays

• The Prosecutor General (PG) and the Financial Investigations Section (SEF) have limited powers, leading to delays in investigations and prosecutions.
• There are no written policies or procedures for prioritizing investigations based on risks, nor guidelines for processing money laundering cases.

Progress in Anti-Money Laundering Efforts

Despite these challenges, Monaco has made progress in improving its anti-money laundering efforts. The authorities have adopted a proactive approach towards identifying undeclared or falsely declared cross-border transportation of cash and bearer instruments, which seems to be working in practice.

Weaknesses in the System

• The number of prosecutions for money laundering is low due to significant delays in investigations.
• The confiscation of assets has been limited.
• The authorities lack mechanisms and sufficient resources to manage seized assets.

Terrorist Financing

Monaco has taken steps to improve its monitoring and reporting mechanisms. However, more needs to be done to prevent the misuse of financial systems for terrorism financing purposes.

Conclusion

While Monaco’s economy is strong, there are still significant challenges to overcome in terms of maintaining its integrity. The authorities must continue to work towards improving their anti-money laundering efforts and addressing the weaknesses in the system.