Financial Crime World

Title: Strict KYC Procedures in Monaco’s Banking Sector: Preventing Money Laundering and Terrorist Financing

Monaco’s banking and financial sector, renowned for its discretion and high-end clientele, is committed to combating financial crimes through stringent Know Your Customer (KYC) procedures. This commitment is reinforced by Monaco’s Act no. 1362, enacted in 2009 and updated by Sovereign Decree. The following procedures aim to prevent money laundering, terrorism financing, and corruption.

Identity Verification

Under the Act no. 1362, financial institutions in Monaco are required to:

  • Ascertain client identity: Clients must present an official and valid identity document featuring a photograph.
  • Document retention: Banks retain a copy of the client’s identity document for record-keeping.

Acceptable Identity Documents

Acceptable identity documents include a valid:

  • National identity card
  • Passport
  • Monaco residence permit

Address Verification

If an identity document fails to provide an address, financial institutions must verify clients’ addresses through alternative documents:

  • Utility bills
  • Insurance certificates

These documents, as well as the clients’ identification documents, must be retained by the bank.

Information Required from Clients

Beyond identity verification, financial institutions must also learn about their clients’ financial circumstances:

  • Financial status: Understanding a client’s financial situation
  • Intended account use: Knowing the intended use of the account
  • Asset details: Assessing the origin, composition, and scope of a client’s assets

Financial institutions are also obligated to:

  • Assess economic profiles: Understanding a client’s economic background and status
  • Source and amount of income: Verifying the origin and amount of a client’s income.

Monitoring Transactions

Once a business relationship is established:

  • Transaction monitoring: Financial institutions monitor their clients’ transactions for consistency with previously obtained information.
  • Updated information: The bank may request updated identification data and reverify clients’ information when necessary.

These measures are crucial for maintaining the integrity of Monaco’s banking sector and combating financial crimes.