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Money Laundering Techniques Exposed in Monaco
A recent report by Moneyval, a permanent monitoring body of the Council of Europe, has highlighted significant money laundering risks in the Principality of Monaco. According to the report, Monaco’s internationally-oriented financial activities make it a prime target for illicit cross-border financial flows.
Criminal Activities and Vulnerabilities
The report states that criminals commit frauds abroad and launder their proceeds in Monaco, posing a serious risk to the country’s financial system. Moneyval has identified vulnerabilities in Monaco’s measures against money laundering and has proposed necessary improvements to the Monegasque system.
Criticism and Recommendations
Despite not being at the center of an international money laundering or terrorist financing case, Monaco is criticized for its modest number of money laundering investigations, low number of convictions obtained, and even lower number of confiscation measures ordered. The report also calls for major improvements in the transparency of legal persons, investigation, and prosecution regarding terrorism financing.
- Key recommendations include:
- Improving the effectiveness of anti-money laundering measures
- Enhancing transparency of legal persons
- Increasing cooperation between financial institutions and law enforcement agencies
Government Response
In response to the report, the Monegasque Government has set up a follow-up committee to adopt the recommendations under the authority of the Minister of State. The government has also allocated a substantial budget for expert recruitment and specialized consultancy firms.
Legislative Developments
Legislative developments are expected to continue in 2023, including the creation of a register of beneficial owners and trusts. SICCFIN, the Monaco Financial Information Service, has been equipped with a risk-based approach tool called STRIX, allowing for effective supervision of various sectors.
Commitment to Implementation
The Government of Monaco has expressed its full support for the recommendations made in the Moneyval report and is committed to implementing the actions recommended to preserve the attractiveness of the Principality. The next review by Moneyval is scheduled for December 2024.