Financial Crime World

Title: Monaco’s Financial Crimes Under Scrutiny: MONEYVAL Releases Fifth-Round Evaluation Report

Overview

On January 23, 2023, the Monetary and Financial Action Task Force (MONEYVAL) published the fifth-round evaluation report on the Principality of Monaco. Following an onsite visit in March 2022, this report evaluates Monaco’s effectiveness in preventing and combating money laundering (ML) and terrorism financing (TF).

Assessment Highlights

The evaluation report reveals several issues where Monaco shows a moderate level of effectiveness. These areas include:

  • ML/TF risk understanding
  • International cooperation
  • Application of AML/CFT measures in the private sector
  • Use of financial intelligence
  • Implementation of United Nations targeted financial sanctions on TF and proliferation financing

Areas Requiring Major Improvements

Major improvements are required in the following areas:

  1. Enhancing transparency of legal persons
  2. Effectiveness of supervision
  3. ML investigations and prosecutions
  4. Confiscation and recovery of proceeds of crime

Unaddressed ML/TF Risks

Monaco has made some progress in identifying ML/TF risks, but certain sectors such as:

  • Casinos
  • Company services providers
  • Trusts
  • Virtual assets

as well as organized crime-related and external ML threats, have not been adequately addressed.

Challenges for the Monegasque Financial Intelligence Unit (SICCFIN)

The Monegasque Financial Intelligence Unit (SICCFIN) faces a significant lack of human and technical resources. Despite this, SICCFIN produces high-quality analyses that are not fully utilized by investigative authorities. Most Suspicious Transaction Reports (STRs) originate from banks with limited contributions from other sectors, raising questions about their quality.

Recommendations

To tackle the identified deficiencies, Monaco needs to:

  1. Enhance its efforts to identify and prioritize ML cases.
  2. Seize and confiscate proceeds of ML and predicate offenses.
  3. Improve the supervisory system.

Conclusion

The MONEYVAL report provides essential insights into Monaco’s ML/TF landscape and offers guidance for authorities to take necessary corrective measures. This report is also crucial for financial institutions, professionals, and other stakeholders operating in or dealing with Monaco to comply with international anti-money laundering and counter-terrorist financing regulations.