Financial Crime World

MONACO TIGHTENS AML REGULATIONS: NEW DUTIES AND SANCTIONS FOR COMPANIES, FOUNDATIONS, AND ASSOCIATIONS

In a bid to combat fraud and money laundering, Monaco has introduced new anti-money laundering (AML) regulations, imposing fresh duties on companies, foundations, and associations. Two laws, No 1.449 and 1.550, passed in July and August 2023 respectively, have created a new category of “actors” responsible for collecting and retaining essential information on legal entities and individuals.

New Requirements for Companies

The new regulations require companies to designate a “Basic Information Officer” who will be responsible for:

  • Collecting information on beneficial owners, shareholders, and partners
  • Maintaining this data for ten years

This officer may be an individual or a legal entity appointed internally or externally. The list of professionals eligible to undertake this duty has been expanded to include:

  • Lawyers
  • Notaries
  • Multi Family Offices
  • Chartered accountants

Increased Accountability for Senior Executives and Board Members

The new laws also impose increased accountability on senior executives and board members, who must demonstrate that they have fulfilled their duties regarding basic information and beneficial owner declarations.

Sanctions and Liability

Liability has been introduced, with sanctions ranging from EUR 100,000 to criminal penalties, including imprisonment and fines. The responsible bodies for verifying and enforcing these regulations are:

  • Monegasque Financial Security Authority
  • Business Development Agency
  • Ministry of Interior

Practical Consequences

The practical consequences of these new laws include the imposition of sanctions on companies that fail to comply with AML regulations, as well as increased duties and responsibilities for existing actors. Liquidators of commercial or civil companies established in Monaco may face criminal sanctions if they do not properly retain information during liquidation.

Strengthening Internal Organization and Governance

Experts warn that the internal organization, control, and governance of a company have become essential criteria for setting up an activity in Monaco, particularly when subject to AML provisions. The Principality has also strengthened its technical and human resources to combat fraud.

Implementing Legislation

The implementing legislation is expected to provide further details on these developments, which will shape the future of AML regulations in Monaco.