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Monaco’s Economic Sectors Face Threats from Money Laundering and Terrorism

A Growing Concern

Monaco, known for its safety and financial stability, is not immune to the risks of money laundering (ML) and terrorism financing (TF). According to a recent report, ML remains the main predicate offence in Monaco, ahead of corruption and trafficking in influence.

Low Risk of Terrorism but Threats Remain

While the risk of terrorism in Monaco is considered low, authorities are aware of the threat posed by terrorist organizations. The report notes that there have been no successful attacks on the territory, but there is a growing concern about the potential for TF to be used to fund terrorist activities.

Economic Sectors at Risk

The financial sector is particularly vulnerable to ML and TF, with banks and other financial institutions reporting suspicious transactions. However, the report highlights that:

• The quality of these reports can vary.
• There are concerns about delays in filing and limited resources to investigate.

Investigations and Prosecutions

The number of prosecutions for ML in Monaco is low due to significant delays in investigations. The report notes that there are no written policies or procedures for prioritizing investigations based on risks, which can lead to a lack of progress in complex cases.

Confiscation Efforts

Monaco has made efforts to improve asset recovery, but there is no strategy or official policy in place. As a result:

• Very few confiscation orders have been made.
• None cover property held by third parties.

Proactive Approach to Cash Transportation

The authorities have adopted a proactive approach to identifying undeclared or falsely declared cross-border transportation of cash and bearer instruments, which has led to one case where measures were ordered to recover undeclared assets.

Limited Resources and Cooperation

The report highlights that:

• SICCFIN, the agency responsible for producing strategic material on ML risks, suffers from significant human and technological resource limitations.
• Cooperation with French counterparts is not fully developed, which can hinder efforts to detect and prosecute ML and TF cases.

Conclusion

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Monaco’s economic sectors face significant threats from ML and TF, which require a coordinated response from authorities. While there have been some efforts to improve asset recovery and investigations, more needs to be done to address the root causes of these crimes and ensure that the financial sector is secure.