Financial Crime World

Monaco Urged to Increase Anti-Money Laundering Efforts by Europe’s Anti-Laundering Watchdog (MONEYVAL)

Report Calls for Significant Improvements in Monaco’s AML/CFT Regime

Strasbourg, 23 January 2023

MONEYVAL, the Council of Europe’s anti-money laundering and countering the financing of terrorism (AML/CFT) body, has published a report highlighting the need for Monaco to beef up its measures against money laundering (ML) and terrorist financing (TF). While some progress has been noted, significant gaps and fundamental improvements are required.

Key Areas in Need of Enhancement

Moderate Effectiveness but Significant Improvements Needed

MONEYVAL recognized some progress in areas like risk understanding, international cooperation, and use of financial intelligence. However, improvements are required in:

  • Transparency of legal persons
  • TF investigations and prosecutions
  • Supervision
  • ML investigations and prosecutions

Areas Requiring Greater Attention

Monaco’s efforts to understand ML/TF risks in some sectors have been commended, but a more in-depth analysis is required for others:

  • Casinos
  • Company services providers
  • Trusts and Foundations
  • Virtual Assets

Additional threats related to organized crime and external money laundering also need assessment.

Insights not Fully Utilized by Investigative Authorities

The Monegasque Financial Intelligence Unit (SICCFIN) was praised for its high-quality analysis, but concerns were raised regarding:

  • Inconsistent investigations and prosecutions
  • Low conviction rates
  • Lack of confiscation and recovery of proceeds of crime

Deficiencies in Monaco’s Supervisory System

MONEYVAL pointed to deficiencies in Monaco’s supervisory system, specifically:

  • Inadequate beneficial ownership checks
  • Lack of risk understanding
  • Insufficient sanctions for non-compliance

Private Sector Compliance

The implementation of AML/CFT obligations by the private sector was assessed as partially met. While the banking sector shows satisfactory results, other sectors, such as casinos and jewelers, have poorer compliance. This is attributed to a poorer AML/CFT risk understanding and compliance culture among these sectors.

Designated non-financial business and professions (DNFBPs) have filed limited suspicious transaction reports (STRs) even in significant sectors.

UN Security Council Resolutions (UNSCRs)

Monaco’s steps to implement targeted financial sanctions under UN Security Council Resolutions were noted, but further improvements are required due to technical deficiencies and absence of a risk-based approach.

No Prosecutions or Convictions for TF

No prosecutions or convictions for terrorist financing in Monaco were reported, which raises concern over whether the jurisdiction fully aligns with its risk profile.

Recommendations and Next Steps

Monaco must make significant strides to enhance its efforts in:

  • Obtaining beneficial ownership information
  • Mitigating risks for high-risk categories
  • Applying more dissuasive sanctions

Additionally, more progress is needed in international cooperation to address systemic and unusual legislative obstacles hindering the provision of mutual legal assistance.

A follow-up evaluation by MONEYVAL is recommended for December 2024.


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