Financial Crimes Act Comes into Force in Monaco: Introducing New Duties for Companies and Individuals
The Principality of Monaco has introduced a new era of financial transparency with the introduction of the Financial Crimes Act, which came into effect earlier this year. The legislation aims to combat money laundering and terrorist financing by imposing strict regulations on companies, foundations, and associations.
Key Provisions of the Law
Disclosure Requirements
According to Laws No 1.449 and 1.550, adopted in July and August 2023 respectively, companies and individuals are now required to disclose essential information about their beneficial owners, shareholders, and partners. This information must be retained for a period of ten years and made available to national authorities upon request.
New Category of “Actors”
The new legislation has introduced a category of “actors” responsible for collecting, transmitting, and retaining this information. These actors may include lawyers, notaries, accountants, and other professionals who provide services to companies and individuals.
Basic Information Officer
The Basic Information Officer, who may be an individual or a legal entity, is responsible for collecting and retaining this information.
Increased Accountability
Internally, senior executives and the board of directors are now subject to increased accountability and must demonstrate evidence of fulfilling various duties regarding basic information and beneficial ownership declarations. Externally, professionals such as lawyers, notaries, and accountants may be appointed to collect and retain this information on behalf of companies and individuals.
Consequences of Non-Compliance
The legislation also imposes liability on actors who fail to comply with the new regulations, which can result in criminal sanctions, fines, and imprisonment. The Monegasque Financial Security Authority, Business Development Agency, and Ministry of Interior are empowered to impose sanctions up to EUR 100,000.
Practical Consequences
- Sanctions can be imposed by the authorities for non-compliance with the new regulations.
- Existing professionals, such as liquidators of commercial or civil companies established in Monaco, may also face increased liability and potential criminal sanctions if they fail to properly retain information.
Broader Effort
The introduction of these new regulations is part of a broader effort to strengthen anti-money laundering provisions and improve financial transparency in Monaco. The legislation is expected to have significant implications for the internal organization and control of companies operating in the Principality, as well as the way professionals provide services to clients.
Conclusion
As the implementing legislation takes shape, it remains to be seen how these changes will affect businesses and individuals operating in Monaco. However, one thing is clear - the Financial Crimes Act marks a major shift towards greater financial transparency and accountability in the principality.