The Principality of Monaco must better fight against money laundering and the financing of terrorism, said the Council of Europe on Monday, in a report that the Monegasque government immediately said it was “determined to implement”.
Intervened on the spot, at the beginning of 2022, Moneyval, the anti-money laundering body of the intergovernmental organization calls for “fundamental improvements to strengthen the effectiveness of the supervision, investigation and prosecution of money laundering and the confiscation of proceeds of crime”.
In terms of terrorist financing, the report calls for “major improvements in the transparency of legal persons, as well as investigations and prosecutions”, absent as convictions.
“Deeper analysis of the threat”
More generally, if Moneyval “recognizes the considerable work undertaken by Monaco in identifying the risks” linked to money laundering, “further details are necessary”. “The number of suspicious transaction reports from casinos and jewelers remains limited, although these sectors are of particular importance in the Principality”, he notes.
The authors of the report plead for “a more in-depth analysis of the threat, in particular in relation to organized crime”. According to them, the investigations and prosecutions “do not seem to correspond to the risk profile of Monaco, with particular shortcomings concerning complex cases”.
The report is concerned about the “very low number of convictions obtained” and the “even smaller number of confiscation orders ordered, none of which concern property of equivalent value”. “Monaco must improve its supervision system”, argues Moneyval. ” Punishments […] are limited, disproportionate to the grievances raised, non-dissuasive and imposed late”.
Progress expected by the end of 2024
“Major improvements are needed to strengthen the Principality’s effectiveness in international cooperation,” the report also points out. It notes that extradition requests addressed to Monaco are rejected in one out of two cases. In response, the Monegasque government expressed “its full support for the recommendations made” by Moneyval, assuring in a press release that it wanted to “implement them quickly”.
Without waiting for the publication of the report, the National Council (Monegasque legislative assembly) adopted several laws at the end of 2022, in particular in areas such as international legal assistance, seizure and confiscation of instruments and proceeds of crime, underlined in a press release the Minister of Finance and the Economy, Jean Castellini. “The next few months will allow us to strengthen our measures,” he promised.
What is already done
Following the G20 in London in 2009, Monaco made a commitment to fiscal transparency which enabled it to leave the “grey list” of non-cooperative countries drawn up by the OECD. Since 2016, the Principality has concluded tax cooperation agreements with more than sixty countries.
Since the beginning of 2021, for any cash transaction from 10,000 euros, merchants are required to take due diligence measures. In a state with 30% millionaire residents attracted by soft taxation, such cash payments are common. The law now requires verifying the identity of the buyer and making a declaration of suspicion in the event of doubt about the origin of the funds, or even verifying the “socio-economic background” of the customer when he is is an ongoing business relationship.
The cash payment limit remains at 30,000 euros but anyone entering or leaving the principality with 10,000 euros or more in cash (which includes precious metals such as gold) may now be subject to police investigation and precautionary seizures if the provenance is doubtful. Moneyval invites Monaco to report on progress made in December 2024.