Page 38 - Monaco Economy 129

ZOOM

to €1,000. In Monaco, it is set at €30,000 obligations placed on them. proceeds resulting from income tax fraud,
and, since 2018, it is necessary to prove the in particular "taking into account that the
origin of funds upwards of €10,000. As a Too heavy? absence of incrimination could be an intrinsic
result, people could be tempted to come to The problem is that we were forced to vote vulnerability”.
the Principality to try to make cash purchases on the texts urgently with the risk of making Income tax fraud does not exist in Monaco,
that they could not make in France, with mistakes, impacting the clarity of the texts, or because income tax itself does not exist. On
the aim of laundering money from crimes going too far in the obligations we imposed on the other hand, tax fraud committed abroad
committed abroad. ourselves. This situation clearly risks harming and laundered in Monaco is punishable. It is,
the attractiveness of the Principality. If creating therefore, the role of the judge to determine
Does cash culture vary from country to a business in Monaco is an obstacle course, whether funds are of legal origin or not and
country? we are not going to attract companies that whether the funds were laundered in Monaco.
In some countries like Germany, the will set up, create jobs, etc. The person will not be prosecuted for the
Netherlands or Austria, there a lot of cash underlying offence of tax fraud but for money
transactions. This is why these countries Isn’t denunciation antithetical to the legal laundering. This is a stand-alone offence.
have not wanted to legislate to impose limits profession? In this manner, the Principality of Monaco
on cash spending. In Monaco, there is less For lawyers, there are specific provisions contributes to the prosecution of tax fraud
and less circulation of cash. Banks have put to establish the scope of the law. We are offences committed abroad – if it is done
in place procedures to limit cash withdrawals subject to due diligence obligations within indirectly.
and deposits. Morals have evolved and digital the framework of our advisory relationship,
payments have taken up more space. when we assist the client in its implementation The presumption of money laundering
or when we participate in a transaction. On represents for some an “absolute weapon”
It's complicated for a business centre, for the other hand, in all procedural and judicial which allows judicial authorities to presume
example, to play detective and discover the matters, there is no anti-money laundering that goods or capital used or held secretly
origin of funds. Couldn't certain controls be obligation, otherwise it would be antithetical to come from an offence. Clearly, if the suspect
the responsibility of the administration? the legal profession. Denouncing your client is is not able to justify the origin of the funds,
These are the effects of the harmonisation contrary to the very essence of this profession. it is considered money laundering. However,
of European law. However, Monégasque there are so few convictions in Monaco for
business centres do not have the same PO According to the Moneyval report, “despite money laundering. Why do you think this is?
Box activity as in Anglo-Saxon countries, the registration obligations having expired The presumption of money laundering is a very
where semi-fictitious companies or offshore since 2020, only 31% of civil companies (and useful tool, a major development included in
companies with hidden shareholders are 78% of commercial companies) have declared the Third European Anti-Money Laundering
hosted. In these states, there is no control their beneficial owner(s) in the dedicated Directive. Previously, it was necessary to
over the establishment of companies, unlike register”, the offenders are not punished. determine the underlying offence of money
Monaco which requires authorisation for any How do you explain that? laundering in order to convict; now, it can
commercial company creation. To create an It must be said that the government took simply be assumed with a reversal of the
SCI (civil real estate company), a sovereign months to set up the register of beneficial burden of proof as to the illicit origin of the
order now even requires a criminal background owners and make it work properly. Furthermore, funds. However, Monaco remains a small
check. Where else in Europe is registration until now, the sanctions for non-compliance state. The material elements are difficult to
required to create an SCI? with keeping the company register up to demonstrate and the financial files complex.
date were a fine of barely €2 or €3. There It is very complicated to establish that money
What is the feedback from professionals? was, therefore, no binding measure requiring is of illicit origin and that the author of the
They tell us they are swamped; the obligations people to keep this register up to date; but laundering was informed or could not have
in Monaco are higher than those which exist what poses the biggest problem in my opinion been unaware of the illicit origin, even though
in France or elsewhere. In Monaco, since is the defunct civil companies. There are civil the underlying offences are committed abroad.
we left the blacklist of tax havens, we have companies registered in the company register, These cases require years of procedures and
implemented more draconian measures than even though they have not been active in legal battles with foreign authorities.
abroad and yet we still suffer from this negative Monaco for 20 or 30 years. The register has
image of a country that launders money. There not been cleaned up, in particular because Will Monaco be subject to more evaluations
is poor communication and poor explanations the process of deregistering companies was in 2024?
are given. This was seen during Moneyval's complex. The new legislation will thus allow In addition to the FATF, other evaluations are
assessment. The subjects were rated poorly the administration to clean up more easily indeed planned: the fifth evaluation round
because they were not supported or helped. and the uncooperative will be much more of GRECO on the prevention of corruption
The guidelines which were, nevertheless, heavily punished. and the promotion of integrity within central
called for by professionals and provided for governments (top executive functions) and law
by the 2020 law, were not put in place before According to Moneyval, the Principality of enforcement agencies; as well as the GREVIO
the arrival of Moneyval; and now it is they Monaco should analyse in depth the risk evaluation (domestic violence).
who suffer the most from the ever-heavier that its financial sector is used to launder

38