Monaco Financial Intelligence Unit Under Scrutiny by Global Watchdog

Global Regulatory Body Adds Monaco to “Grey List”

The Financial Action Task Force (FATF) has added Monaco to its list of countries subject to increased monitoring, a move that has raised concerns among financial regulators. This decision was made at a plenary meeting in Singapore, where the FATF also placed Venezuela on the list of nations with “strategic deficiencies” in countering money laundering and terrorist financing.

Progress Made by Monaco

According to the FATF report, Monaco has made significant progress on certain aspects of its fight against money laundering, including:

• The establishment of a new combined financial intelligence unit (FIU) and anti-money laundering/combating the financing of terrorism (AML/CFT) supervisor
• Strengthening its approach to detecting and investigating terrorism financing
• Implementing targeted financial sanctions
• Risk-based supervision of non-profit organizations

Areas for Improvement

However, the FATF identified several areas in which Monaco must make further progress, particularly in terms of:

• Money laundering and tax fraud committed abroad
• Strengthening its understanding of risk in relation to money laundering and income tax fraud committed abroad
• Demonstrating a sustained increase in outbound requests to identify and seize criminal assets abroad
• Enhancing the application of sanctions for AML/CFT breaches

Recent Efforts by Monaco

In recent months, Monaco has taken steps to address these concerns by:

• Passing nine new laws aimed at strengthening its financial security authority and anti-money laundering legal arsenal
• Implementing targeted financial sanctions and supervision of non-profit organizations based on a risk assessment

Next Steps for Monaco

The FATF’s decision is seen as a warning shot to Monaco, which must now work to implement an action plan to resolve the identified strategic deficiencies within agreed-upon timeframes.