After twenty-five years under the presidency of Étienne Franzi, Robert Laure has been elected to head the AMAF, the Monaco Association of Financial Activities. The transition took place in the midst of the "Moneyval" crisis. While the Principality's potential placement on the FATF's grey list is of concern to the whole of Monaco, in this interview this professional recalls the efforts made by the Principality over the last 18 months to achieve compliance. He also believes that developing a financial business in a potentially "stigmatised " country is not "an easy thing", but neither is it synonymous with "apocalypse".
Since the publication of the Moneyval report in January 2023, which placed the Principality under increased scrutiny, the Monegasque authorities have stepped up their efforts to strengthen their preventive and repressive arsenal in the fight against money laundering. What do you think of the action taken over the last 18 months? Has the Principality gone into "commando mode" as Prince Albert II wished?
I think so, yes. In the space of a year and a half, remarkable changes have been made in the Principality. Both from a legislative and regulatory point of view. Significant human and technical resources have also been mobilised. The effort has therefore been a collective one. The Executive with the Government, the Legislative with the National Council, the Judicial Services Department, and the Public Safety, Economic Development and Tax Departments, among others; not forgetting all the economic players. The financial sector was of course also involved, but to a slightly different degree.
What do you mean by this?
The conclusions of the Moneyval report on the banking sector were generally positive. The report did not identify any particular shortcomings, which is quite logical because when it comes to fighting money laundering, the banking and financial sector has always been ahead of other economic activities. Firstly, for historical reasons, as this sector was the first to be targeted. Secondly, the vast majority of banking establishments in Monaco belong to major international groups that have been rigorously applying these measures for a long time. So there is a natural historical knowledge. Another important factor is the compulsory membership of banks and management companies in the AMAF employers' association. This ensures that all members are kept abreast of regulatory developments and practices, which is not necessarily the case in other sectors of the economy, where it may be more difficult to grasp this complex subject.
When will we know the fate of the Principality? Can you give us a more precise timetable?
Since the report published by Moneyval in January 2023, several steps have been taken. The Monegasque authorities first drafted a report for the FATF. This document, the POPR (Post Observation Period Report), was intended to detail all the measures put in place by the Principality. It was submitted in March 2024. Subsequently, several additional discussions took place. On 7 May, a meeting was held in Istanbul with The International Cooperative Research Group (ICGR). Following this meeting, further exchanges took place. This international group will then forward its recommendations to the FATF plenary meeting in Singapore at the end of June (between 24 and 28). A decision will be taken at the end of this plenary meeting.
At the end of June 2024, we should therefore know whether or not the Principality will be placed on the FATF's grey list. Are you confident? Do you think the outcome will be positive?
It's not for us to say. I can't give you a definitive opinion on that. What I can say is that, once again, the whole Principality has done a remarkable job over the last 18 months. It should also be remembered that Monaco is not starting from scratch. Anti-money laundering legislation is already in place. A great deal of work has been done, and the results have already been presented to the various supervisory bodies. Another important point to emphasise is the political will at the highest level. The need to meet Moneyval's criteria for the Principality has been affirmed by the Sovereign Prince himself.
If the Principality were to be placed on the grey list, this would have far-reaching consequences for Monegasque banks and customers: longer processing times for financial flows, more intrusive banking correspondents, red tape, a slowdown in business, etc. Are you concerned about the competitiveness of the banking centre?
If the Principality is placed on the grey list, will there be more controls? In principle, yes. Will processing times be longer? In principle, yes. Will the administrative procedures be more cumbersome? In principle, yes. But what timeframes are we talking about? What controls are we talking about? We are not in a situation where Monaco would be ostracized. Certain financial flow management operations will undoubtedly be less fluid. However, this is not yet a certainty, as it will depend on who we are dealing with and which countries we are talking to. Some countries will be more questioning, others much less. Maintaining and developing a financial business in a country 'stigmatised' by being placed under enhanced supervision is certainly not easy, but neither is it synonymous with apocalypse. The AMAF would do its utmost to support its members.
When asked about the consequences of a move to the grey list, a banking union in the Principality told us: "It's hard not to imagine staff cuts or closures of establishments (management companies or banks) linked to wealthy clients who will be less inclined to transfer their assets to the Principality if every transaction carried out poses an execution difficulty". What do you think of this statement?
It's just one hypothesis among many... I understand and share the concerns, but I think this line of reasoning is excessive. First of all, a banking establishment is an extremely regulated business. It takes a long time for a credit institution to open and/or cease trading, often several years. Secondly, the notion of a country's attractiveness cannot be reduced to this economic situation alone. There is a difference between the reality of a "classification" and its perception. At the end of the FATF's plenary meeting in March 2024, some of the jurisdictions removed from the "grey list" are still perceived as "risky" by some wealthy clients.
In an interview with Monaco info, Pierre-André Chiappori, Government Counsellor - Minister for Finance and the Economy, said that if the Principality were placed on the grey list, it would only last for a limited time, between 1 and 1? years. Why do you think this is?
If the FATF were to place the Principality on the grey list and Monaco were to be asked to comply with additional requirements, given all the work that has already been done upstream, it would not take years to respond. It can be done very quickly: 6 months, a year, or a year and a half seems to me to be a coherent timeframe.
In the same interview, Pierre-André Chiappori indicated that placing Monaco on the grey list is not "technically" a "sanction" but "reinforced surveillance". Isn't this a way of minimising reality? Is it a posture? Is it just language?
No, I don't think so. I agree with Pierre-André Chiappori. Enhanced supervision" is not accompanied by sanctions; its aim is to lead a jurisdiction towards the operational adoption of an effective AML/CFT system. The 'penalty', as I stressed earlier, would be the difficulty of working easily with our counterparties and our customers.
credit photo : © Photo Iulian Giurca / L’Observateur de Monaco
