Monaco’s Financial Crime Problems Deepen: Moneyval Report Reveals Inadequate Efforts to Combat Money Laundering
Incomplete Ownership Databases and Delayed Suspicious Transaction Reports Exposed
A team of European inspectors from the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) has criticized Monaco’s efforts to combat financial crime, citing numerous shortcomings in its anti-money laundering systems. The report highlights incomplete ownership databases, delayed reports on suspicious transactions, and inadequate resources to tackle complex cases.
Poor Effectiveness in Prosecuting Money Laundering and Recovering Assets
Despite Prince Albert II’s pledge in 2005 to “clean up” Monaco’s financial system, the Principality has failed to make significant progress. Local prosecutors have won only six convictions since 2017, with the longest prison sentence being three years and the largest fine €150,000. Authorities rarely seize or confiscate tainted funds.
Lack of Strategic Approach in Tackling Money Laundering
Moneyval found that Monaco lacked a strategic approach to tackling money laundering, with investigations and prosecutions not matching its risk profile. The report emphasizes the importance of strengthening financial intelligence gathering and improving cooperation with other countries in investigating cases connected to the Principality.
Risks of Being Added to FATF “Gray” Monitoring List
Monaco’s failure to improve its anti-money laundering systems could result in being added to the Financial Action Task Force (FATF) “gray” monitoring list, which would impact capital flows to the country. The FATF is set to review Monaco’s progress at its next plenary session in February.
Major Obstacles in Extraditing Suspects and Cooperating with Foreign Governments
The report highlights major obstacles in extraditing suspects and cooperating with foreign governments in investigating cases connected to Monaco. Despite these challenges, the Service d’Information et de Controle sur les Circuits Financiers (SICCFIN) was found to be a key hub of financial intelligence, but lacking sufficient personnel and IT resources.
Commitment to Implementing Moneyval’s Recommendations
The European team has given Monaco two years to improve its anti-money laundering systems before reporting back. The Principality’s government has committed to implementing Moneyval’s recommendations to comply with international standards.
Key Findings:
- Incomplete ownership databases
- Delayed reports on suspicious transactions
- Lack of strategic approach in tackling money laundering
- Poor effectiveness in prosecuting money laundering and recovering assets
- Major obstacles in extraditing suspects and cooperating with foreign governments