Financial Crime World

Monaco Urged to Step Up Efforts Against Money Laundering and Terrorist Financing

Strasbourg, January 23, 2023 - MONEYVAL Report Highlights Major Improvements Needed

The Council of Europe’s anti-money laundering body, MONEYVAL, has called on Monaco to strengthen its measures to combat money laundering (ML) and financing of terrorism (FT). According to a recent report, Monaco has made significant progress in understanding ML/TF risks, international cooperation, and the application of anti-money laundering and combating the financing of terrorism (AML/CFT) preventive measures by the private sector. However, major improvements are required in several areas.

Major Areas for Improvement

  • Investigating and Prosecuting ML Cases: MONEYVAL has identified shortcomings in investigating and prosecuting ML cases, particularly in complex cases.
  • Confiscation and Recovery of Proceeds of Crime: The report highlights that Monaco’s confiscation measures ordered do not cover property of equivalent value or held by third parties. Additionally, the number of convictions achieved is low, and sanctions for failure to comply with AML/CFT obligations are limited, not proportionate, and imposed with delays.
  • Supervisory System: MONEYVAL has expressed concerns over the lack of fundamental improvement in Monaco’s supervisory system, citing deficiencies in beneficial ownership fit and proper checks, as well as shortcomings in risk understanding.

Private Sector Implementation

  • The private sector’s implementation of AML/CFT measures is satisfactory, but questions remain over the quality of information provided due to a large volume of defensive reporting and excessively long transmission times.
  • Designated Non-Financial Business and Professions (DNFBPs): DNFBPs have a poorer AML/CFT risk understanding and compliance culture.

Progress Made

  • Monaco has been commended for reforming its framework enabling the implementation of TF and PF-related TFS under the United Nations Security Council Resolutions.
  • However, technical deficiencies were identified regarding the risk of freezing measures being lifted. Additionally, there have been no prosecutions or convictions for FT in Monaco.

Next Steps

  • MONEYVAL has decided to apply its enhanced follow-up procedure and invited Monaco to report back in December 2024.
  • The report concludes that major improvements are needed to enhance the Principality’s effectiveness in international cooperation, citing systemic and unusual legislative obstacles hindering the provision of mutual legal assistance by Monaco.

Conclusion

The MONEYVAL report emphasizes the need for Monaco to strengthen its measures to combat money laundering and terrorist financing. By addressing the identified shortcomings, Monaco can improve its effectiveness in investigating and prosecuting ML cases, confiscating and recovering proceeds of crime, and strengthening its supervisory system.