Financial Crime World

Monaco’s Financial Crime Data Analysis Under Scrutiny: MONEYVAL Report Reveals Room for Improvement

A recent evaluation report by MONEYVAL, a Council of Europe body, has highlighted several areas where Monaco needs to improve its efforts in preventing and combating financial crime. The report, published on January 23, 2023, is the fifth-round evaluation of the Principality’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

Moderate Level of Effectiveness

According to the report, Monaco demonstrates a moderate level of effectiveness in addressing ML/TF risks. However, major improvements are needed in several areas.

Key Areas for Improvement

  • Transparency of legal persons
  • Supervisory effectiveness
  • ML investigations and prosecutions
  • Confiscation of proceeds of crime

Sectors Yet to Be Adequately Addressed

The report highlights that while Monaco has undertaken efforts to identify ML/TF risks, some sectors have not yet been adequately addressed. These include:

  • Casinos
  • Company services providers
  • Trusts
  • Virtual assets

Additionally, the country’s financial intelligence unit, SICCFIN, lacks human and technical resources, which limits its ability to produce high-quality analyses.

Enhancing Efforts in Identifying and Prioritizing ML Cases

Monaco also needs to enhance its efforts in identifying and prioritizing ML cases, particularly:

  • Seizing
  • Confiscating
  • Recovering proceeds of crime

The report notes that the private sector has implemented AML/CFT obligations to some extent, but there are significant gaps in risk understanding and compliance culture among designated non-financial businesses and professions (DNFBPs).

The report reveals that Monaco’s legal framework is appropriate for implementing targeted financial sanctions related to terrorism financing and proliferation financing. However:

  • Delays in transposing designations have impacted their effectiveness
  • The country has failed to convict or prosecute any cases of terrorism financing, which appears to be due to shortcomings in risk analysis

Recommendations

To address these issues, MONEYVAL recommends that Monaco:

  • Enhance transparency of legal persons
  • Improve supervisory effectiveness
  • Increase ML investigations and prosecutions
  • Confiscate proceeds of crime
  • Strengthen international cooperation
  • Improve understanding of ML/TF risks

The evaluation report highlights several areas where Monaco needs to improve its AML/CFT regime to meet international standards. With Monaco’s status as an international economic and financial centre, it is crucial that the country takes decisive action to address these issues and prevent financial crime.