Monaco Tightens Grip on Customer Verification in Banking Sector

Stricter Regulations to Prevent Money Laundering and Terrorism Financing

The Principality of Monaco has introduced a new law requiring banks and other professionals to conduct thorough customer checks, further solidifying its reputation for stringent financial regulations and commitment to transparency. The legislation aims to prevent money laundering, terrorism financing, and corruption by ensuring that financial institutions have a clear understanding of their customers’ identities and business relationships.

Key Requirements

• Financial institutions must identify account holders from the outset of a business relationship.
• They are required to collect information and documents necessary to establish the characteristics of that relationship.
• Banks must retain copies of identification documents provided by customers, including photographs.
• Accepted forms of identification include national identity cards, passports, and Monegasque residence permits.

Additional Verification Requirements

• If an identity document does not include an address, financial institutions are required to verify the customer’s address using alternative documentation, such as utility bills or insurance certificates.
• Banks must gather information about customers’ financial circumstances, including their income, assets, and economic profile.
• This enables the bank to gauge whether transactions performed by the customer are consistent with its knowledge of that individual.

Ongoing Monitoring

• Once a business relationship has been established, financial institutions are required to continue monitoring account activity and request updates on identification data where necessary.
• The goal is to ensure that banks have ongoing visibility into their customers’ activities and can detect any suspicious behavior promptly.

International Standards

The new law reflects Monaco’s commitment to international standards for combating money laundering and terrorist financing. It demonstrates the country’s dedication to maintaining a secure and transparent financial environment, ensuring the integrity of its banking sector and protecting its reputation as a reliable financial hub.