Monaco’s Anti-Money Laundering Crackdown: Busy Registrar, Looming Threat of “Grey List”
In the heart of Monaco’s Business Development Agency, the Register of Beneficial Owners office has been a hub of activity. The past few months have seen a steady stream of company directors lining up to comply with Monaco’s transparency drive.
Quote from a well-dressed director: “It’s a bit hectic now, but last time the line was even longer.”
Monaco’s Transparency Drive
In the race against time to beef up its anti-money laundering system, Monaco faces the prospect of joining the list of countries deemed deficient in the fight against financial crime, the Council of Europe’s “grey list.”
Registrar’s Office Buzzing with Activity
Monaco prides itself as an international financial center, and the push for transparency comes as a response to the threat of being downgraded, joining the ranks of jurisdictions like the United Arab Emirates, Gibraltar, and Bulgaria.
Criticism from Moneyval: Moneyval, a Council of Europe body, identified several “deficiencies,” “weaknesses,” and “shortcomings” in Monaco’s anti-money laundering system in its December 2022 evaluation report.
Monaco’s Lack of Proper Risk Analysis
Monaco’s lack of proper risk analysis was a major criticism in Moneyval’s report. Monaco’s international profile, particularly its banking and financial services, makes it a prime target for suspicious financial flows. The principality is known as a haven for many criminals, offering a place to launder tax fraud, embezzlement, and corruption proceeds.
Recent Examples of Money Laundering in Monaco
Monaco has seen several examples of money laundering in recent times. A recent example is the concealment of Russian assets in Monaco since Russia’s invasion of Ukraine.
Monaco’s Response to Moneyval’s Recommendations
Monaco’s government, headed by Pierre Dartout, vowed to comply with the most demanding international standards in response to Moneyval’s recommendations. The initial 12-month observation period began soon after the report’s publication in late 2023. Monaco must demonstrate its efforts to avoid finding itself on the grey list, with the final decision to be made by the Financial Action Task Force (FATF) in 2024.
Monaco’s commitment: Despite these challenges, Monaco remains committed to implementing the recommended reforms and hopes to maintain its reputation as a significant player in the international financial scene.
Key Points
- Monaco’s transparency drive: Company directors lining up to comply with Monaco’s transparency drive
- Monaco’s anti-money laundering system needs beefing up
- Threat of being on the Council of Europe’s grey list
- Moneyval’s critique: Lack of proper risk analysis & deficiencies
- Monaco’s response: Vowed to comply with international standards & face initial observation period
- FATF to make final decision in 2024