Monaco’s Economic Sectors Face Threats from Money Laundering and Terrorism

The principality of Monaco, renowned for its safety and financial prowess, is not immune to the risks of money laundering (ML) and terrorist financing (TF). Despite its reputation, Monaco faces a moderate risk of ML and TF, with property fraud being the most common predicate offense.

Assessment of Risk

According to a recent report by an international organization, several areas of concern have been identified. One of these is the lack of human and technological resources at the country’s financial intelligence unit, SICCFIN. The unit produces strategic material on understanding ML risks, but struggles with:

Significant delays in submitting suspicious transaction reports (STRs)
TF-related issues
Limited ability to address these concerns

Investigation and Prosecution of Money Laundering

The report highlights that the number of prosecutions for ML is low due to:

Significant delays in investigations
Lack of written policies or procedures for prioritizing investigations based on risks
No guidelines on processing ML investigations
Low conviction rates, with only one conviction handed down since 2018

Confiscation and Asset Recovery

Monaco has made efforts to improve effectiveness in asset recovery, but there is no strategy or official policy in place. As a result:

Few confiscation orders have been made
None cover property of equivalent value or property held by third parties

Terrorist Financing

The report highlights the need for improved cooperation with French counterparts to detect cases of TF. The authorities’ resources to detect cases are limited, and the application of provisional measures is still very limited due to:

Shortcomings in the legal system
Limited ability to address these concerns

Recommendations

To address these concerns, the report recommends that Monaco:

Strengthen its financial intelligence unit with additional human and technological resources
Improve the timeliness and quality of STRs from all sectors, including non-financial ones
Develop written policies and procedures for prioritizing ML investigations based on risks
Establish guidelines for processing ML investigations and improving conviction rates
Develop a strategy or official policy for asset recovery and confiscation
Enhance cooperation with French counterparts to detect cases of TF

By implementing these recommendations, Monaco can better protect its economic sectors from the threats of money laundering and terrorist financing.