Financial Crime World

Monaco Struggles with Financial Inclusion and Crime, Says MONEYVAL Report

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Monaco, a small but financially significant principality on the French Riviera, has been found to be struggling with financial inclusion and crime by a recent report from MONEYVAL, a Council of Europe anti-money laundering body.

Financial Inclusion Challenges

Moderate Effectiveness in Preventing Money Laundering (ML) and Terrorism Financing (TF)

Monaco demonstrates a moderate level of effectiveness in preventing and combating ML/TF. However, major improvements are needed in several areas, including:

  • Transparency of legal persons
  • Supervision
  • Money laundering investigations and prosecutions
  • Confiscation of proceeds of crime

Areas for Improvement

Identifying Money Laundering/Risk Financing Risks

Monaco has been working to identify ML/TF risks, but some sectors such as:

  • Casinos
  • Company services providers
  • Trusts
  • Virtual assets

have not yet been adequately addressed.

Limited Human and Technical Resources

The Monegasque Financial Intelligence Unit (Financial Channels Supervisory and Monitoring Service, SICCFIN) has a significant lack of human and technical resources, which limits its ability to produce high-quality analyses that are fully used by investigative authorities.

Suspicious Transaction Reports

  • Most suspicious transaction reports come from banks
  • Limited contributions from other at-risk sectors

Monaco needs to enhance its efforts to identify and prioritize ML cases, especially seizing, confiscating, and recovering the proceeds of ML and predicate offences.

Understanding Risk and Supervision

Monaco has been found to have a poor understanding of risk in relation to certain types of obliged entities, which undermines its capacity to apply tailored supervision. The private sector has implemented anti-money laundering (AML)/counter-terrorism financing (CFT) obligations to some extent, but there are concerns about the quality of suspicious transaction reports from banks.

Investigations and Prosecutions

  • Number of money laundering investigations and prosecutions remains modest
  • Gaps relating to complex cases

Monaco has secured convictions for ML involving proceeds of crime generated abroad and stand-alone ML convictions, but not for ML committed by third parties, which is a significant deficiency given its status as an international economic and financial centre.

Sanctions

Monaco’s sanctions are proportionate but not effective or dissuasive. The number of confiscation measures ordered is still low and does not concern property of corresponding value or property held by third parties.

International Cooperation

The report also highlighted the need for Monaco to improve its contribution to international cooperation, particularly in relation to mutual legal assistance and extradition.