Monaco Moves to Strengthen Financial Crime Sentencing Guidelines Amid Money Laundering Concerns
In a bid to enhance its reputation as a responsible financial jurisdiction, Monaco has initiated a series of reforms aimed at bolstering its financial crime sentencing guidelines. This move comes in response to criticism from Moneyval, a Council of Europe body responsible for evaluating compliance with anti-money laundering and counter-terrorist financing standards.
Background
In December 2022, Moneyval published a report highlighting Monaco’s shortcomings in several key areas, including:
- Lack of proper risk analysis
- Absence of transparency measures
- International profile as a major financial center, making it vulnerable to suspect financial flows and money laundering activities
Monaco’s reputation as a haven for laundering funds from various illicit activities, such as tax fraud, embezzlement, and corruption, has also been a concern. A recent example is the concealment of Russian assets in Monaco since Russia’s invasion of Ukraine.
Response and Action Plan
In response to Moneyval’s findings, Monaco has launched a 12-month observation period during which it must demonstrate its efforts to comply with international standards. The Financial Action Task Force (FATF), an intergovernmental body responsible for combating money laundering and the financing of terrorism, will review Monaco’s progress in 2024.
To address Moneyval’s concerns, Monaco’s authorities have been working diligently to:
- Implement a register of beneficial owners for Monégasque companies
- Conduct transparency exercises, with company directors queuing up to provide information about their ownership structures
Challenges and Commitment
While some business leaders have expressed frustration with the new requirements, Monaco’s government remains committed to meeting international standards and avoiding placement on the “grey list” of countries considered deficient in the fight against money laundering.
By strengthening its financial crime sentencing guidelines, Monaco aims to maintain its reputation as a responsible and transparent financial jurisdiction. The principality’s determination to comply with international standards demonstrates its commitment to combating money laundering and preventing illicit financial activities.