Title: Monaco’s Battle Against Financial Crimes: MONEYVAL’s Scathing Report
Subtitle: The Principality’s Fifth-Round Evaluation Reveals Areas for Improvement in Money Laundering and Terrorism Financing Prevention
Date: February 19, 2023
Author: Dr. András Csúri, euCRIM Author
Monaco Under Scrutiny
Monaco, the globally renowned Mediterranean hub for wealth and glamour, came under the scrutiny of the Council of Europe’s Moneyval (MONEYVAL) committee since January 23, 2023. After an onsite visit in March 2022, the fifth-round evaluation report was issued, outlining Monaco’s strengths and weaknesses in the fight against money laundering (ML) and terrorism financing (TF).
MONEYVAL’s Assessment of Monaco
In this enhanced round of evaluations, MONEYVAL scrutinizes the effectiveness of Member States in combating ML and TF. Monaco showed moderate levels of efficiency in several areas, including:
- Understanding of ML/TF risks
- International cooperation
- Application of AML/CFT preventive measures in private sectors
- Implementation of financial intelligence use
- Enforcement of United Nations targeted financial sanctions
Areas for Improvement
Despite some efforts in identifying ML/TF risks, Monaco requires significant improvements in transparency of legal persons, supervision, ML investigations, prosecutions, confiscation of proceeds of crime, and understanding of risks.
Significant Lack of Resources in the Financial Intelligence Unit
Monaco’s Financial Intelligence Unit (SICCFIN) faces a considerable lack of human and technical resources. Yet, they produce high-quality analyses that are often not effectively utilized by investigative authorities.
Inadequate Cooperation from Professionals in At-Risk Sectors
The majority of Suspicious Transaction Reports (STRs) stem from banks. Poor cooperation is observed from professionals in at-risk sectors like casinos, company services providers, trusts, and virtual assets, as well as organized crime and external ML threats.
Reporting from Private Sector Needs Improvement
Although some progress has been made in implementing AML/CFT measures in the private sector, improvements are required in the DNFBPs (Designated Non-Financial Businesses and Professions). These sectors lack a proper AML/CFT culture and risk understanding. The number of STRs filed by casinos and jewellers—significant sectors in Monaco—is inadequate.
Ineffectiveness in Identifying and Prioritizing ML Cases
Monaco must significantly improve its ability to identify and prioritize ML cases. Moreover, efforts are needed to seize, confiscate, and recover the proceeds of ML and predicate offenses.
Enhancing the Supervisory System
The supervisory system needs to be fundamentally enhanced, particularly with regard to beneficial ownership. The shortcomings in risk understanding impair the authorities’ capacity to apply targeted supervision for obliged entities.
Conclusion
Monaco, the epitome of luxury living, must escalate its efforts to tackle ML and TF challenges in this post-pandemic era. The insights from MONEYVAL’s evaluation report can serve as a guide for the Principality to strengthen its regulatory framework and prioritize the implementation of effective supervisory and investigative systems.