Financial Crime World

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Monaco’s Tough Know Your Customer Regulations Aim to Combat Money Laundering and Terrorism

In a move aimed at preventing money laundering, terrorism financing, and corruption, Monaco has implemented strict know your customer (KYC) regulations for its banking and financial institutions. The country’s commitment to international anti-money laundering standards is reflected in Act No. 1362, adopted in 2009 and reinforced by subsequent sovereign decrees.

Thorough Customer Checks Required

Under the new regulations, banks and other covered professionals are required to conduct thorough customer checks from the outset of any business relationship. This involves identifying account users and collecting all necessary information and documents to establish the characteristics of the relationship.

Customer Identification Crucial

Banks must identify customers through official and valid identity documents, which include a photograph. Accepted documents include:

  • National identity cards
  • Passports
  • Monegasque residence permits

In cases where the identity document does not show an address, banks must verify the customer’s address using alternative documentation, such as:

  • Utility bills
  • Insurance certificates

Gathering Customer Information

In addition to verifying identification, banks are required to gather information about customers’ financial circumstances, reasons for opening an account, assets, activities, economic profile, and income. This comprehensive approach aims to ensure that institutions have a thorough understanding of their clients.

Ongoing Monitoring Required

Once the business relationship is established, banks must continue to monitor transactions to ensure they are consistent with their knowledge of customers. In cases where discrepancies arise, institutions may request updates on identification data.

Conclusion

Monaco’s KYC regulations demonstrate its commitment to combating financial crimes and maintaining the integrity of its banking system. As a major financial hub, the country’s efforts to prevent money laundering and terrorism financing serve as an example for other jurisdictions around the world.