A report released today by the council of Europe's anti-money laundering body MONEYVAL, urges Monaco to strengthen its efforts in combating money laundering (ML) and terrorism financing (TF).
MONEYVAL acknowledges that Monaco has shown a moderate level of effectiveness in understanding ML/TF risks, international cooperation, implementing preventive measures by the private sector, utilizing financial intelligence, and implementing targeted financial sanctions. However, the report identifies significant improvements that are necessary regarding the transparency of legal entities, as well as TF investigations and prosecutions.
The report emphasizes the need for fundamental improvements in supervision, ML investigations and prosecutions, and the confiscation of criminal proceeds. While Monaco has made commendable efforts to identify ML/TF risks, further analysis is needed in sectors such as casinos, company services providers, trusts, and virtual assets. Additionally, more analysis is required regarding organized crime and external threats related to money laundering.
MONEYVAL expresses concern over the inconsistency between Monaco's risk profile and ML investigations and prosecutions, particularly in complex cases. The report highlights the low number of convictions and confiscations, which do not adequately cover assets of equivalent value or those held by third parties. Monaco is urged to improve efforts in identifying and prioritizing ML cases, as well as seizing, confiscating, and recovering proceeds from ML and predicate offenses.
The report concludes that Monaco needs significant improvements to its supervisory system. Deficiencies are identified in relation to beneficial ownership checks, which undermine the ability to apply tailored supervision for obligated entities. Sanctions for non-compliance with AML/CFT obligations are deemed limited, disproportionate, ineffective, and imposed with delays.
Regarding the private sector, MONEYVAL notes that AML/CFT obligations are partially fulfilled. While the number of suspicious transaction reports (STRs) from the banking sector is considered satisfactory, the volume of defensive reporting and delays in information transmission raise concerns about the quality of information provided. The designated non-financial business and professions (DNFBPs) show a weaker understanding of AML/CFT risks and compliance culture. The number of STRs filed by casinos and jewellers, despite their significant role in the Principality, remains limited.
Monaco receives praise for reforming the framework for implementing targeted financial sanctions related to terrorism financing and proliferation financing under United Nations Security Council Resolutions (UNSCRs). However, technical deficiencies regarding the lifting of freezing measures are identified. While an initial risk assessment of the non-profit sector has been conducted, it has not been fully utilized to construct a risk-based approach.
Existing awareness-raising and supervision measures are deemed inadequate. MONEYVAL observes that there have been no TF prosecutions or convictions in Monaco. Given the gaps in TF risk analysis, it cannot be concluded that this aligns with the country's risk profile.
While Monaco generally seeks cooperation from counterparts, it does not entirely align with the jurisdiction's risk and context. The prosecution authorities satisfactorily execute requests, but systemic and unusual legislative obstacles hinder the provision of mutual legal assistance by Monaco. Extradition requests also face challenges due to the restrictive interpretation by courts of the dual criminality principle.
Based on the evaluation results, MONEYVAL has decided to implement an enhanced follow-up procedure and has called for Monaco to report back in December 2024.
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact firstname.lastname@example.org or your usual A.C.T. contact.