The Principality of Monaco must fight money laundering and terrorist financing better, the Council of Europe said in a report on Monday, which the Monegasque government immediately said was “determined to implement”.
Intervening on the ground in early 2022, Moneyval, the intergovernmental organization’s anti-money laundering body, is calling for “fundamental improvements to strengthen the effectiveness of the monitoring, investigation and prosecution of money laundering and the seizure of criminal proceeds”. .
With regard to terrorist financing, the report calls for “significant improvements in the transparency of legal entities and in investigations and prosecutions” without any convictions.
“Deeper Analysis of the Threat”
More generally, if Moneyval “acknowledges the considerable work Monaco has done in identifying the risks associated with money laundering,” “more details are needed.” “The number of suspicious transaction reports from casinos and jewelers remains limited, although these areas are of particular importance in the Principality,” he notes.
The report’s authors advocate “a more in-depth analysis of the threat, particularly as it relates to organized crime”. According to them, the investigations and prosecutions “do not appear to fit Monaco’s risk profile, with particular shortcomings in complex cases”.
The report expresses concern at the “very low number of convictions issued” and “an even lower number of confiscation orders issued, none of which involve equivalent property”. “Monaco needs to improve its regulatory system,” argues Moneyval. “Punish […] limited, disproportionate to the complaints made, not dissuasive and imposed belatedly”.
Progress expected by the end of 2024
“Major improvements are needed to strengthen the Principality’s clout in international cooperation,” the report also emphasizes. He notes that extradition requests addressed to Monaco are denied in one out of two cases. In response, the Monegasque government expressed “its full support for Moneyval’s recommendations” and assured in a press release that it intends to “implement them swiftly”.
Without waiting for the report to be published, the National Council (Monegasque Legislative Assembly) passed several laws at the end of 2022, particularly in areas such as international legal assistance, confiscation and confiscation of instruments and proceeds of crime, as highlighted in a press release of the Minister for Finance and Economics, Jean Castellini. “The next few months will give us the opportunity to step up our measures,” he promised.
What is already done
After the G20 summit in London in 2009, Monaco committed to fiscal transparency, which allowed it to leave the OECD’s “grey list” of non-cooperative countries. Since 2016, the Principality has concluded tax cooperation agreements with more than sixty countries.
Since the beginning of 2021, merchants have had to fulfill due diligence requirements for all cash transactions over 10,000 euros. In a state where 30% of millionaires are attracted to soft taxation, such cash payments are common. The law now requires verification of the buyer’s identity and filing of a suspicion statement if there is any doubt about the source of the funds, or even verification of the customer’s “socio-economic background” if the relationship is ongoing.
The cash payment limit remains at 30,000 euros, but anyone who enters or leaves the Principality with 10,000 euros or more in cash (including precious metals such as gold) can now be subjected to police investigations and precautionary confiscations if the origin is dubious. Moneyval invites Monaco to report on progress made in December 2024.