MONACO TIGHTENS RULES ON MONEY LAUNDERING AND FINANCIAL CRIMES
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To prevent money laundering, financing of terrorism, and corruption, the government of Monaco has strengthened its regulations on banking establishments.
Enhanced Due Diligence Requirements
Under a recent decree, banks operating in Monaco are now required to take extra precautions when dealing with clients. The new rules include:
- Stakeholder Identification: Every bank must identify all stakeholders of an account by collecting and keeping track of proof of identity for each individual involved, including individuals opening accounts as well as legal entities.
- Client Information Collection: Banks must collect information on clients’ residential addresses, professional and financial situation, economic background, and origin of funds.
- Transaction Monitoring: Banks must monitor transactions completed with clients to ensure they are legitimate and consistent with their knowledge of the customers.
Periodic Reviews and Updates
The regulations also require banking establishments to:
- Conduct periodic reviews of business relationships, depending on the level of risk assigned to the customer.
- Request updates on personal data and socio-economic documentation at any time during a transaction or as part of a periodic review.
Suspicious Transactions and Reporting
In cases of complex or unusual transactions, especially those involving cash, banks are required to:
- Obtain relevant information and supporting documents from clients.
- Examine the origin and destination of funds in such transactions.
If a bank is unable to meet its due diligence obligations, it may raise suspicions about the legitimacy of a transaction or business relationship, leading the bank to report the suspicious activity to its supervisory authority. In extreme cases, banks may be required to refuse a transaction or terminate a business relationship.
Supervision and Enforcement
The Service d’Information et de Contrôle sur les Circuits Financiers (SICCFIN) is the competent Monegasque supervisory authority for fighting money laundering, financing of terrorism, and corruption. The agency is responsible for ensuring that banks comply with the new regulations and takes action against any institution found to be non-compliant.
Strengthening Monaco’s Reputation
The new rules are designed to strengthen Monaco’s efforts in preventing financial crimes and maintaining its reputation as a secure and reputable financial center.