Monaco, a small yet powerful financial hub, has been continually working to enhance its regulatory framework against money laundering and terrorism financing. A positive report published by the Council of Europe regarding Monaco’s efforts has shone a spotlight on this remarkable progress. Titled ‘Anti-money laundering and counter-terrorist financing measures Monaco,’ the comprehensive 65-page follow-up report, released on December 10, 2024, underscores Monaco’s strides in complying with Financial Action Task Force (FATF) standards.
Achievements in Compliance
Significant Progress Since 2022
Since the adoption of its mutual evaluation report in 2022, Monaco has demonstrated significant advancement in improving its anti-money laundering (AML) measures. MONEYVAL, the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, has confirmed that Monaco has achieved “large compliance” with 32 out of the 40 FATF Recommendations and full compliance with seven. The only exception is Recommendation 15, which concerns new technologies and remains “partially compliant.”
MONEYVAL’s assessment highlights Monaco’s improved ratings for several recommendations. Notably, Monaco has achieved “compliant” ratings for Recommendations 6, 7, and 12, which pertain to targeted financial sanctions related to terrorism financing, proliferation, and politically exposed persons, respectively. Furthermore, the principality has earned “largely compliant” ratings for Recommendations 4, 8, 24, 25, 26, 27, 28, 31, 34, 35, and 37, upgrading from “partially compliant” statuses. These results reflect MONEYVAL’s recognition of Monaco’s efforts to address technical compliance deficiencies within the two years following its mutual evaluation report.
Addressing Compliance Deficiencies
The report acknowledges Monaco’s commitment to meeting general expectations regarding AML compliance. Within two years of the initial evaluation, the principality has worked diligently to address the majority of technical compliance shortcomings identified. MONEYVAL’s assessment accentuates the effectiveness of Monaco’s strategies and measures in combating money laundering and terrorism financing, along with its enforcement of international standards.
Monaco’s ongoing improvement efforts align with its goal to enhance financial transparency and security. The principality has succeeded in elevating its ratings to a satisfactory level across several critical areas, reflecting its determination to adapt to evolving global standards. This proactive approach not only demonstrates Monaco’s dedication to financial integrity but also fortifies its reputation within the international financial community.
Context of MONEYVAL’s Role
Monitoring and Evaluation
MONEYVAL, as the monitoring body of the Council of Europe, plays a pivotal role in evaluating compliance with international standards aimed at combating money laundering, terrorism financing, and the proliferation of weapons. With its mandate covering the assessment of 33 states and territories, MONEYVAL offers thorough recommendations to national authorities, thereby fostering improvements to their regulatory frameworks. Monaco’s significant strides in enhancing its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) systems reflect this overarching global commitment.
MONEYVAL’s comprehensive assessments are critical for maintaining cohesive and robust international financial systems. By holding states and territories accountable for their AML/CFT measures, MONEYVAL sets a benchmark for financial integrity and security. Its evaluations provide valuable insights and actionable recommendations that guide national authorities in upgrading their regulatory mechanisms, adapting to emerging threats, and fulfilling global compliance obligations.
Broader Implications
Monaco, despite its small size, holds a significant position as a powerful financial hub. Over the years, it has relentlessly worked to improve its regulatory framework to combat money laundering and the financing of terrorism. A recent positive report by the Council of Europe has highlighted Monaco’s noteworthy advancements in this area. Released on December 10, 2024, the 65-page follow-up report titled ‘Anti-money laundering and counter-terrorist financing measures Monaco’ details the principality’s significant progress. This comprehensive report underscores Monaco’s ongoing efforts to align with the standards set by the Financial Action Task Force (FATF). The recognition by the Council of Europe not only validates Monaco’s dedication but also places a spotlight on its commitment to maintaining robust financial security. Through these stringent measures, Monaco aims to bolster its global reputation as a secure and transparent financial center.
