Financial Crime World

Monaco’s Push to Combat Financial Crimes: MONEYVAL Report Reveals Moderate Progress, Urgent Needs for Improvement

MONEYVAL, the Council of Europe’s anti-money laundering and counter-terrorism financing (AML/CFT) body, has released its fifth-round evaluation report on Monaco, highlighting considerable progress but underscoring substantial gaps in the principality’s efforts to prevent and tackle financial crimes.

Key Findings from the MONEYVAL Report

  • Improved Understanding of ML/TF Risks: Monaco has made strides towards improving its ML/TF risk understanding, but further refinement is needed, especially concerning areas not yet adequately addressed.
  • Effectiveness of Supervision: Enhancing supervision’s effectiveness is crucial to increase ML investigations and prosecutions and address transparency issues in legal persons.
  • Resource Allocation: Sufficient resources for Monaco’s Financial Intelligence Unit (SICCFIN) and cooperation from professionals outside the banking sector are essential.
  • Addressing Risk Areas: Efforts to address risk areas like casinos, company services providers, trusts, and organized crime-related threats need improvement.
  • Virtual Assets: Monaco needs to focus on implementing adequate frameworks for dealing with the emerging risks of virtual assets.

Areas Requiring Improvement

Money Laundering and Terrorist Financing (ML/TF)

  • Understanding of ML/TF Risks: Monaco’s understanding of ML/TF risks requires further refinement, particularly in the following sectors: DNFBPs, casinos, and jewellers.
  • ML Investigations and Prosecutions: Monaco must expand its efforts in ML investigations and prosecutions and target both proceeds of crime and third-party criminals.
  • Penalties and Confiscation Measures: The effectiveness of current penalties is unclear, with a low number of confiscation measures ordered, some of which do not involve commensurate value or assets held by third parties.

International Cooperation and Transposition of Financial Sanctions

  • International Cooperation: Effective international cooperation is necessary to combat terrorist financing and other financial crimes.
  • Transposition of Targeted Financial Sanctions (TFS): Delayed implementation of TFS designations has weakened Monaco’s mechanisms for implementing TFS at international, European, and national levels.

Sectorial Focus

  • Casinos and Company Services Providers: Monaco’s casinos need to file an adequate number of Suspicious Transaction Reports (STRs) and increase their ML/TF risk awareness and compliance culture. Similar improvements are needed for company services providers.
  • DNFBPs and Professionals: Many DNFBPs and professionals remain unregistered under the AML/CFT regulatory framework, and further efforts are needed to raise their risk awareness and promote a compliance culture.
  • Organized Crime-Related Threats: Effective strategies to address organized crime-related threats are essential to bolster Monaco’s efforts in combating financial crimes.

Conclusion

Monaco has made significant progress in combating financial crimes but requires urgently needed advancements to address the weaknesses identified by MONEYVAL. These improvements will fortify Monaco’s standing as a reputable international economic and financial center, enhancing its commitment to transparency and adherence to global standards.