Financial Crime World

Monaco’s Economic Sectors: A Review of its Strengths and Weaknesses

Located on the French Riviera, Monaco is a small but prosperous principality known for its safety and financial stability. While it boasts many strengths, Monaco’s economy faces challenges in anti-money laundering (AML) and combating the financing of terrorism (CFT).

Main ML Predicate Offence

According to the Financial Action Task Force (FATF), the main predicate offence in Monaco is money laundering, which involves the concealment of illicit funds. This crime is often linked to other criminal activities such as drug trafficking, fraud, and corruption.

Investigation and Prosecution

Monaco’s investigation and prosecution of ML cases are hindered by:

  • Significant delays
  • Limited investigating powers
  • Lack of written policies or procedures for prioritizing investigations based on risks

As a result, the number of prosecutions and convictions is low, with few confiscation orders made.

Confiscation

The confiscation of assets in Monaco is challenging due to:

  • Limited powers and resources
  • No official strategy or policy in place
  • Rarely made confiscation orders that do not cover property of equivalent value or property held by third parties

Terrorist Financing

Monaco’s authorities have adopted a proactive approach to identifying undeclared or falsely declared cross-border transportation of cash and bearer instruments. However, co-operation with French counterparts is limited, and the authorities’ resources to detect cases are limited in some respects.

SICCFIN

The Système d’Information et de Contrôle des Flux Financiers (SICCFIN) is Monaco’s financial intelligence unit responsible for:

  • Analyzing suspicious transactions
  • Providing strategic material to regulated entities

While SICCFIN produces high-quality operational analyses, it suffers from a significant lack of human and technological resources.

Conclusion

While Monaco’s economy faces challenges in AML and CFT, the principality has made efforts to improve its effectiveness in these areas. However, more needs to be done to address:

  • Significant delays
  • Limited powers
  • Lack of resources that hinder the investigation and prosecution of ML cases