Financial Crime World

Monaco: A Haven for Licit and Illicit Financial Arrangements

Located in the French Riviera, Monaco is a small principality with a long history of secretive banking practices and tax havens. Despite its reputation as a hub for international figures involved in both licit and illicit markets, Monaco’s history continues to attract individuals with ties to organized crime, authoritarian strongmen, and those seeking to avoid scrutiny.

Criminal Networks Abound

Monaco’s non-native population allows transnational criminal actors to operate freely. Evidence suggests that individuals tied to organized crime pass through and do business in the principality. The Lucchese and Genovese crime families, as well as the Black Sea and Khazarian mafias, have been linked to Monaco’s financial sector.

Russian Oligarchs and Crimean Leaders

The war in Ukraine has led authorities to monitor and freeze Russian assets in France and, to a lesser extent, in Monaco. Many Russian oligarchs are believed to have acquired property in the principality through Monegasque banks. The Calabrian ‘Ndrangheta and Neapolitan Camorra also appear to have effective networks in France and Monaco.

Lack of Domestic Mafia-Style Groups

Despite Monaco’s reputation as a haven for organized crime, there is no evidence to suggest the existence of domestic mafia-style groups within the principality. While private sector actors may participate in organized crime-related activities, the level of corruption among state officials and other state actors is very low.

Corruption Concerns

While Monaco has made significant progress in government transparency and ethics, concerns remain about its compliance with anti-corruption recommendations. The principality’s banking secrecy laws have been criticized by the international community, and access to information remains poor.

Criminal Justice System

Monaco’s criminal justice system is strong, with a fairly independent judiciary and a low level of corruption reported. The principality has cooperation agreements in place with INTERPOL, Europol, and Francopol, as well as bilateral extradition agreements with many countries.

Economic and Financial Environment

Historically, Monaco has been an uncooperative tax haven, but it has since adopted the Organization for Economic Cooperation and Development Model Tax Convention. The government has created a financial investigation unit and is modernizing the banking and financial sector to combat money laundering threats.

Civil Society and Social Protection

Monaco respects civil liberties, including freedom of expression within the media. However, the civil-society sector is weak in Monaco, with few restrictions on the formation of NGOs. The government has taken steps to enhance protection for whistleblowers and raise awareness about cyberattacks.

Conclusion

As Monaco continues to navigate its complex financial landscape, it remains to be seen whether the principality will fully address concerns about corruption, money laundering, and organized crime. For now, it appears that Monaco’s reputation as a haven for licit and illicit financial arrangements will continue to be a subject of debate.