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MONEYVAL: “It’s hard to believe that in a country where there

is so much wealth, there is no money laundering.”

by Milena Radoman
In January 2023, the Moneyval report, placing Monaco under reinforced monitoring, had the effect
of a bolt from the blue. Irina Talianu, head of the Evaluations Unit and in charge of the mission in
the Principality, explains the reasons for such a rating (such as the low number of convictions for
money laundering) and what could now happen.

times more than the Principality. The country but nothing has been decided. Everything
has been under regular monitoring for two will depend on the committee's decision.
and a half years. Two reporting cycles are required, ie after
four years, so if Monaco cannot convince the
© Tous droits réservés of Monaco should analyse in depth the procedure would be put in place.
According to the report, the Principality
Moneyval committee, a reinforced compliance
risk of its financial sector being used to

other types of tax offences not punishable
This non-compliance process involves several
Irina Talianu, launder proceeds from income tax fraud and What does that entail?
Cheffe de l’unité évaluations
Head of the Evaluations Unit by Monégasque law, particularly those stages: a letter from the Secretary General
committed abroad, “considering that the of the Council of Europe to the country's
What are Monaco's main shortcomings in absence of incrimination could be an authorities precedes a high-level mission
the fight against money laundering which intrinsic vulnerability”. Should Monaco organised in the state which is in a situation
led to reinforced monitoring? criminalise tax fraud more when the country of non-compliance, to meet the ministers
Low scores relate to failings in money does not subject its nationals and residents and relevant senior officials. In the third step,
laundering investigations, prosecutions and to income tax? Moneyval can make an official public statement
convictions, as well as confiscations and It is not an obligation for a state to penalise on its website announcing that the state is
recovery of the proceeds of crime. Over the income tax fraud. Our recommendation is not meeting the standards. The fourth step
period 2017-2021, 192 investigations were not to change the way a country deals with is to refer the case for possible review under
opened in Monaco for money laundering but the issue of taxation but to control the risk of the FATF International Cooperation Review
only 19 prosecutions were made . Monaco money laundering. During our visit in March Panel procedure. It is the antechamber of
*
is a regional financial centre with significant 2022, the threat posed by tax fraud, specially the infamous grey list of non-cooperative
financial flows. It is a country with fairly committed abroad, was absent from the risk countries, drawn up by the OECD; but this whole
high risk exposure. We assess whether the analysis. The country can organise itself as it scenario would not be before 2025. There will
number of convictions is consistent with pleases, for example by adopting preventive be a decision in May 2024 with the FATF and in
the risk analysis. It's hard to believe that in measures, a methodology so that the various December 2024 with the Moneyval committee
a country where there is so much wealth, regulated professionals, such as estate on the procedure to follow.
with a major financial centre, very open to agents, wealth management and private banks
the international world, there is no money understand the reflexes to adopt. This risk Does reinforced monitoring by Moneyval
laundering. It’s a question of understanding must be named. necessarily put the state on the FATF grey
the risks. We also noted a considerable lack list?
of human and technological resources at the What will happen next? No. The FATF has its own procedures, even if
Financial Circuits Information and Control There are two parallel procedures, one we do collaborate together. If a country has
Service (SICCFIN). by the FATF and one by Moneyval. We at at least two low scores out of 11 , the FATF
*
Moneyval will analyse the progress recorded intervenes and takes control. It decides to put
There is no set standard on the appropriate by the Principality in its compliance with the country under observation/monitoring,
number of convictions… FATF standards, following our own rules and then on the grey list if the country is not
No, of course not. We will compare with procedures. During the December 2024 plenary, compliant. Monaco has currently reached the
countries with comparable profiles like the committee will make a decision on what alert threshold to trigger FATF monitoring. If
Liechtenstein or San Marino - we always to do next - namely, whether to continue the we make an analogy with school, a country
have a horizontal analysis. Monaco can be reinforced monitoring procedure or place rated 5/10 or less can enter into reinforced
compared with Liechtenstein, which has Monaco on regular monitoring, or even remove monitoring by Moneyval and if it is rated
approximately the same population and the all monitoring procedures. After an initial 3/10 or less it can be subject to monitoring
same GDP. Liechtenstein, which has a better report, it is rare to remove a country from any by the FATF.
rating regarding convictions, displays 48 follow-up. The good option for Monaco would
with less than three rated as having a “substantial” level of
convictions, that is to say approximately 10 be to be classified under regular monitoring * compliance
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