Financial Crime World

Monaco at Risk of Being “Grey-Listed” Over Money Laundering Concerns

A Wake-Up Call for Financial Transparency

A recent report published by the Council of Europe has raised significant concerns about Monaco’s anti-money laundering policies, warning that the country may be placed under intense scrutiny by the international Financial Action Task Force (FATF) watchdog.

Vulnerabilities in Anti-Money Laundering Policies

The report highlights several vulnerabilities in Monaco’s anti-money laundering policies, including:

  • Internationally oriented financial activities: Monaco’s financial industry is a prime target for illicit cross-border financial flows.
  • Inadequate risk analyses: Fraud and corruption risks are not fully accounted for, making it difficult to combat these threats effectively.
  • Insufficient international cooperation: Domestic legislation imposes obstacles to returning responses to requesting countries, hindering international cooperation.

Consequences of Non-Compliance

If Monaco fails to address these structural deficiencies within a one-year observation period, the country risks being named and shamed in a public “grey list”. This could have serious consequences for the country’s financial industry and reputation.

Recommendations for Improvement

The report makes several recommendations for improvement, including:

  • Implementing guidelines for wealth management and private banking firms: To ensure greater compliance with Monaco’s supervisory framework.
  • Strengthening investigative powers: The Prosecutor General should be granted more investigatory powers to combat money laundering and other financial crimes.
  • Improving international cooperation: Domestic legislation must be amended to facilitate the sharing of information between countries.

Monegasque Government Response

The Monegasque government has stated that it is committed to implementing the report’s recommendations quickly, in an effort to align with international standards. However, time will tell whether Monaco can successfully address these concerns and avoid being placed on the “grey list”.

Timeline for Improvement

Monaco has until February 20 to demonstrate its commitment to improving its anti-money laundering policies. If structural reforms are not implemented within this period, the country risks being named and shamed in a public “grey list” as early as mid-2024.

Conclusion

The Council of Europe’s report serves as a wake-up call for Monaco’s financial industry, highlighting the need for greater transparency and cooperation to combat money laundering and other financial crimes. The Monegasque government must take swift action to address these concerns and ensure that its financial sector is compliant with international standards.