Monaco’s Banking Sector: Current Laws and Regulatory Challenges
Overview of Current Laws and Regulations
The current laws and regulations in Monaco regarding the banking sector are based on several key pieces of legislation:
- Monegasque Banking Law (1948): Adopted on 5 October 1948, this law has undergone several amendments since its adoption.
- French Banking Regulation Committee’s Regulation No. 86-21 (1986): This regulation lists activities ancillary to banking activity that banks in Monaco can carry out, dated 24 November 1986.
- AML Legislation of the Principality of Monaco: Over the last decade, this legislation has undergone several updates and amendments.
Regulatory Challenges Facing the Banking Industry
The banking industry in Monaco faces several regulatory challenges:
Implementing and Complying with AML Legislation
- Implementing and complying with Monegasque AML legislation, including recent reforms to take into account the European Union’s fourth and fifth AML directives.
- Strengthening due diligence requirements for corresponding banking relationships and professional certification requirements for AML or countering the financing of terrorism managers.
Consumer Protection Rules
Banks in Monaco are subject to consumer protection rules under Monegasque case law, which requires a stronger duty of information and advice for non-professional clients. However, cross-border activities can create nexus with other countries and trigger the application of foreign consumer public policy rules under certain conditions.
Impact of an Association Agreement with the European Union
The banking sector in Monaco is expected to undergo significant changes over the next few years due to the ongoing negotiations between Monaco and the European Union to sign an association agreement. The conclusion of this agreement will likely have fundamental consequences on the domestic legal framework and may open the Monegasque banking market to new competitors.
Disclaimer
The information above is accurate as of 15 February 2021.