Monaco in a Race Against Time to Avoid FATF Greylist

Monaco, the tiny European principality, is making unprecedented strides to avoid being added to the Financial Action Task Force (FATF) greylist this summer. Known for its glamour and finance, Monaco has long faced scrutiny from international regulators over money laundering, tax evasion, and other financial crimes.

Concerns and Criticism

Monaco received a scathing report from the Council of Europe’s anti-money laundering body, MONEYVAL, in its mutual evaluation report. The report criticized Monaco’s weak client due diligence regime, insufficient supervision of professional sectors, and lack of a risk-based approach to financial regulation. French newspaper Le Figaro further emphasized that Monaco is a preferred destination for high net worth individuals looking to hide their assets.

Steps to Comply

In an effort to meet FATF requirements and enhance transparency within its financial ecosystem, Monaco has set up a central register of beneficial ownership. Monaco’s residents, local businesses, and foreigners began registering their beneficial ownership information starting from December 2023, in response to the new regulation from the Administration des Affaires Jurídiques et Financières (AAJF). Monaco’s Finance Minister, Jean Castellini, confirmed the country’s commitment to international cooperation and working closely with partners.

Registration Response

A total of 271 applications were processed in the first week, and almost 6,500 applications were received by the end of December 2023, demonstrating the urgency to comply with the new measures.

Vulnerability to Financial Crimes

Despite its financial powerhouse image, Monaco’s vulnerability to money laundering and financial crimes has not gone unnoticed. European regulators, such as Europol and MONEYVAL, have placed Monaco under increased monitoring due to its lackluster efforts in combating financial crimes. Monaco featured significantly in the list of Schengen area countries for money laundering in 2023.

The Future

As Monaco works to strengthen its anti-money laundering framework, it remains uncertain whether the country’s financial might and strategic location will be enough to keep it off the FATF greylist. Monaco’s progress and effectiveness in fighting financial crimes will be evaluated in the upcoming months.

This article was written by Stephen Rae, a senior AML analyst at AML Intelligence. Share your thoughts on Monaco’s efforts to avoid the FATF greylist below.