Monaco Faces Scrutiny: MONEYVAL Report Highlights Money Laundering and Financial Crime Concerns
Dr. András Csúri - euCRIM - February 19, 2023
Prince Albert II’s Mediterranean microstate, Monaco, known for its luxury casinos, glamour, and tax exemption status, has drawn international attention yet again. The Monetary and Financial Action Task Force (MONEYVAL) released its fifth evaluation report on Monaco, highlighting concerns over Monaco’s effectiveness in combating money laundering (ML) and terrorism financing (TF).
Assessing Monaco’s Capabilities: March 2022 Onsite Visit
MONEYVAL, an intergovernmental organization dedicated to preventing financial crime, conducted an onsite visit in March 2022. The latest round of assessments focuses on strengthening Member States’ abilities to prevent ML/TF. The report highlights Monaco’s moderately effective performance in several sectors but underlines significant improvements needed in others.
Challenges Faced by Monaco
Understanding ML/TF Risks and International Cooperation
According to the report, significant improvements are necessary to enhance transparency, supervision, ML investigations, and prosecutions. The financial intelligence unit, the SICCFIN, faces a substantial lack of human and technical resources, resulting in high-quality analyses that go unused by investigative authorities.
ML/TF Risk areas requiring improvement:
- ML/TF Risk Understanding
- International Cooperation
- Application of AML/CFT preventive measures in the Private Sector
- Use of Financial Intelligence
- Implementation of United Nations targeted financial sanctions
Addressing Transparency, Supervision, and ML Investigations
Monaco has efforts to identify and prioritize ML/TF risks but has not effectively addressed high-risk sectors like casinos, company services providers, trusts, and virtual assets. The SICCFIN requires improvements to identify and prioritize ML cases for investigation, including seizure, confiscation, and recovery of proceeds of ML and predicate offenses.
Private Sector Challenges
The private sector has implemented AML/CFT obligations to some extent. However, DNFBPs, especially casinos and jewelers, exhibit a poorer AML/CFT risk understanding and compliance culture. Monaco aims to maintain its position as an international financial center necessitates improvement in this area.
The Road Ahead: Enhancing ML/TF Detection and Prevention
Monaco’s fifth MONEYVAL evaluation report underscores the challenges the principality faces in combating ML/TF and regaining international trust. The upcoming years will focus on addressing its weaknesses in risk understanding, expanding collaboration with international partners, and promoting a stronger compliance culture.
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