Financial Crime World

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Monaco’s Financial Crime Investigation Under Scrutiny: MONEYVAL Report Reveals Major Shortcomings

A recent report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has shed light on significant shortcomings in Monaco’s financial crime investigation capabilities.

Overview of the Report

The report, published on January 23, 2023, is based on an onsite visit conducted in March 2022. According to the report, Monaco demonstrates a moderate level of effectiveness in preventing and combating money laundering (ML) and terrorism financing (TF). However, major improvements are needed in several areas.

Areas of Improvement

  • Transparency of legal persons
  • Supervision effectiveness
  • ML investigations and prosecutions
  • Confiscation of proceeds of crime

Shortcomings Identified

The report highlights the following shortcomings:

  • Monaco has not adequately addressed ML/TF risks in certain sectors, such as:
    • Casinos
    • Company services providers
    • Trusts
    • Virtual assets
  • SICCFIN, the country’s financial intelligence unit, lacks human and technical resources, producing high-quality analyses that are not fully utilized by investigative authorities.
  • Monaco’s private sector has implemented anti-money laundering/combating financing of terrorism (AML/CFT) obligations to some extent, but there are significant gaps in risk understanding and compliance culture among designated non-financial businesses and professions (DNFBPs).
  • The number of ML investigations and prosecutions remains modest, with no convictions for TF-related cases.
  • Sanctions in place are proportionate but not effective or dissuasive.

Recommendations

The report concludes that significant improvements are needed for Monaco to effectively prevent and combat ML/TF risks. Recommendations include:

  • Enhancing efforts to identify and prioritize ML cases
  • Seizing, confiscating, and recovering the proceeds of ML and predicate offenses
  • Fundamental improvements in supervisory systems, particularly with regards to beneficial ownership
  • Improving risk understanding and compliance culture among DNFBPs

Conclusion

Overall, the report emphasizes that Monaco’s financial sector plays a crucial role as an international economic and financial centre. To effectively prevent and combat money laundering and terrorism financing risks, significant improvements are needed in several areas.

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