Financial Crime World

MONACO’S FINANCIAL INTELLIGENCE UNIT UNDER SCRUTINY: MONEYVAL REPORT HIGHLIGHTS ROOM FOR IMPROVEMENT

A recent evaluation report by MONEYVAL has shed light on Monaco’s efforts to combat money laundering and terrorism financing. The Principality of Monaco, a prominent international economic and financial centre, has been found to demonstrate a moderate level of effectiveness in preventing and combating these crimes.

Areas for Improvement

The report highlights several areas where improvements are needed:

  • Transparency of legal persons: Monaco’s lack of transparency in this area hinders its ability to effectively supervise and monitor entities.
  • Effectiveness of supervision: The country’s supervisory system is not fully effective, resulting in a significant lack of human and technical resources for the Monegasque Financial Intelligence Unit (SICCFIN).
  • Confiscation of proceeds of crime: Monaco’s confiscation measures are low and not concerning property of corresponding value or held by third parties.

Sectors Not Adequately Addressed

The report notes that certain sectors have not yet been adequately addressed, including:

  • Casinos: Monaco’s casinos have not implemented adequate anti-money laundering (AML) and combating financing of terrorism (CFT) measures.
  • Company services providers: These providers have not demonstrated a sufficient understanding of AML/CFT risks.
  • Trusts: Trusts are not adequately monitored for money laundering risks.
  • Virtual assets: Monaco’s virtual assets sector has not implemented adequate AML/CFT measures.

Private Sector Implementation

The report criticizes the private sector’s implementation of AML/CFT obligations, with many sectors showing a poorer AML/CFT risk understanding and compliance culture. Additionally:

  • Limited STRs filed: The number of Suspicious Transaction Reports (STRs) filed by casinos and jewellers is still limited.
  • Gaps in complex cases: Monaco’s number of money laundering investigations and prosecutions remains modest, with gaps relating to complex cases.

Sanctions and International Cooperation

The report highlights that:

  • Sanctions are proportionate but not effective or dissuasive: Monaco’s sanctions are proportionate but not effective or dissuasive.
  • Delays in transposition: Delays in transposing EU directives have impacted the effectiveness of targeted financial sanctions related to terrorism financing and proliferation financing.
  • Systemic obstacles: Systemic and unusual legislative obstacles hinder Monaco’s provision of mutual legal assistance.

Recommendations

Overall, the MONEYVAL report highlights the need for Monaco to:

  • Enhance its efforts to identify and prioritize money laundering cases
  • Improve its supervisory system
  • Address deficiencies in risk understanding and beneficial ownership
  • Strengthen its anti-money laundering and combating financing of terrorism measures

With a strong financial sector at stake, it is crucial that Monaco takes concrete steps to address these recommendations and improve its effectiveness in preventing and combating money laundering and terrorism financing.