Financial Crime World

Monaco Urged to Strengthen Anti-Money Laundering Measures

The Council of Europe’s anti-money laundering body, MONEYVAL, has issued a report recommending that Monaco take further steps to combat money laundering and the financing of terrorism. The report assesses the country’s compliance with the Financial Action Task Force (FATF) Recommendations as of March 2022.

Key Findings and Recommendations

While acknowledging Monaco’s moderate level of effectiveness in certain areas, such as:

  • Understanding ML/TF risks
  • International cooperation
  • Private sector implementation of anti-money laundering/combating the financing of terrorism (AML/CFT) measures

The report highlights significant improvements are needed to enhance supervision, investigations, prosecutions, and confiscation of proceeds.

Specific Areas for Improvement

  • Monaco has demonstrated commendable efforts in identifying ML/TF risks but requires further analysis in specific sectors such as:
    • Casinos
    • Company services providers
    • Trusts
    • Virtual assets
  • The country is also urged to improve its understanding of organized crime and external money laundering threats.

Capacity for Producing Financial Intelligence

The Monegasque Financial Intelligence Unit (SICCFIN) has shown capacity for producing high-quality financial intelligence, despite significant human and technical resource constraints. However, the report expresses concerns that ML investigations and prosecutions do not align with Monaco’s risk profile, citing a lack of convictions and confiscation measures.

Enhancing Supervisory System

MONEYVAL emphasizes that Monaco needs to enhance its supervisory system, including:

  • Beneficial ownership checks
  • Tailored supervision for obliged entities

Sanctions for non-compliance are considered limited, not proportionate, and rarely imposed.

Private Sector Implementation of AML/CFT Obligations

The report also criticizes the private sector’s implementation of AML/CFT obligations, citing:

  • Defensive reporting
  • Long transmission times in the banking sector
  • Poor compliance culture among designated non-financial business and professions (DNFBPs)

Reform and Awareness-Raising Measures

Monaco is commended for reforming its framework to implement UN Security Council Resolutions on terrorism financing and proliferation financing. However, the report notes that awareness-raising and supervision measures are not proportionate or targeted.

Concerns and Shortcomings

MONEYVAL expresses concerns regarding Monaco’s lack of prosecutions and convictions for terrorism financing, citing gaps in risk analysis. The report also highlights major shortcomings in obtaining beneficial ownership information and insufficient mitigating measures for high-risk categories of legal persons.

Follow-Up Procedure

Monaco is invited to report back on its progress by December 2024 under MONEYVAL’s enhanced follow-up procedure.