Last Monday the anticipated fifth mutual evaluation report on The Principality of Monaco was published by a Committee of Experts of the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) following its approval during a MONEYVAL plenary meeting on December 9th 2022.
The report is the result of a comprehensive evaluation conducted by MONEYVAL’s committee over a period of several months and which concluded in March 2022. MONEYVAL assesses the compliance of its member countries with international standards and provides an analysis based on the FATF’s 40 recommendations.
According to the MONEYVAL evaluation, Monaco has shown a fair level of proficiency in identifying and addressing money laundering and terrorist financing risks, working with other nations, enforcing AML/CFT in the private sector, utilising financial intelligence, and implementing United Nations sanctions related to terrorist financing and proliferation financing. In spite of this, the experts also stated that notwithstanding the Principality’s endeavours, their current AML/CFT risks were not satisfactorily scrutinized and that their present procedures were inconsistent.
The report points out that Monaco is at high risk of money laundering primarily due to its financial services sector which offers a wide range of products thus attracting a large amount of international business. The experts from MONEYVAL stated that while the Monegasque authorities are aware of the main money laundering offenses such as fraud, corruption, and tax evasion, they need to improve their understanding of terrorist financing risks. Furthermore, the report indicates that further assessments and guidelines are required in certain sectors such as gaming, banking, company service providers, trusts and virtual assets.
As a result of the report, MONEYVAL has decided to initiate its enhanced follow-up procedure and has invited Monaco to report back in December 2024. However in the meantime, in line with MONEYVAL’s recommendation that Monaco must “step up its efforts”, it has identified a list of key actions for Monaco to implement including measures to enhance the ability of competent authorities, to detect and investigate potential terrorist financing cases resulting in increased transparency of legal persons, to empower and boost investigative authorities to tackle money laundering and the confiscation of property located overseas, to strengthen and action sanctions screening, to assess risks and apply a risk-based approach.
It’s likely that at the upcoming FATF plenary meeting on February 20th 2023, Monaco will be placed under a one-year monitoring period during which the Monegasque government will collaborate with the FATF to address any structural issues. If Monaco does not make the necessary improvements, it could be placed on the dreaded “grey list” by mid-2024.
Cleversoft recommends that all Monegasque subject persons should review the report* in order to assimilate and identify the key changes which may need to be implemented. We invite all entities and professionals to reach out for any regulatory technology support you may require.
*MONEYVAL Mutual Evaluation Report – Monaco