Following a career with Deloitte Luxembourg, Sébastien Prat established and led Deloitte in Monaco for four years. In 2018, he founded Phoenix Consulting Monaco, a management and strategy consultancy firm, and two years later he created Equilateral.io, a RegTech subsidiary of Phoenix Consulting. The aim is to support clients with digital solutions. Sébastien, who is also Secretary-General for the Association of Compliance Officers of Monaco (AMCO), answered our questions about the National Risk Assessment (NRA).
You recently helped SICCFIN carry out its NRA...
That’s right. The exercise was an opportunity for me to help the Principality identify its threats and vulnerabilities with regard to money laundering. It was a very collaborative process. We met all of the professionals involved so that we could draw up questionnaires specific to their work. This method enabled us first to achieve buy-in, with a participation rate of more than 75%, and second to identify the strengths and weaknesses of each sector.
Who are the professionals involved?
The scope of the assessment has expanded significantly in recent years. Naturally, the professionals with the highest levels of maturity in this area include banks, management companies and trust or company service providers (TCSPs), because they have been involved for a long time. That said, the full scope encompasses 25 sectors, including real estate, auction houses, antique dealers, chartered accountants and the casino.
Do you detect any anxiety among these professionals regarding the complexity of the new regulations?
The perception is predominantly that the regulations will generate additional costs.
So, a better question might be: how do you comply without incurring too high an economic penalty? I should note that this affects 1,500 Monegasque companies, and 80% of them have less than 10 employees. It is clear that a small company of two people cannot employ the same procedure as a bank with 200 staff. And yet the law is the same for everyone. We absolutely have to ensure that compliance does not become an enemy of business.
What’s the solution in this case?
First of all, it’s important to emphasise that the application of this law must be proportionate to the professional subject to its provisions and to the level of risk (money laundering, corruption, terrorist financing, etc.) in the relevant profession.
The first thing to do is to conduct a risk assessment at the company level using the criteria set out in law, taking account of the NRA. Then, in accordance with the outcomes of the assessment, determine and introduce an appropriate control mechanism and procedures.
At what point do you intervene?
We can relieve our clients of some or all of their formalities and help them to outsource implementation of their procedures and KYC process, drafting of their suspicious transaction reports and annual report, and even annual formalisation of their risk mapping. We also offer training (mandatory) in person or as an e-learning package.
All of this is accessible in a single click via their dedicated space on the Phoenix Compliance platform developed by Equilateral.io.
Tell us a little about your team...
Within our team we have a diverse range of complementary backgrounds. Our approach to issues is pragmatic, functional and business-focused, which is why we maintain close links with managers of both financial and non-financial institutions. In addition, my partner holds the CAMS certification for qualified experts in anti-money laundering procedures. It is the gold standard certification, perceived around the world by financial institutions, governments and regulators as the sign of a responsible commitment to protecting the financial system against money laundering.
What are the next deadlines facing the Principality?
In parallel with the NRA, we helped SICCFIN to draft the recently published Guidelines. Keenly anticipated by the professionals subject to this law, the Guidelines aim to clarify the major principles of Monaco’s efforts to combat money laundering.
They will be followed by Practical Guides specific to each profession, starting this year with guides for the real estate, sporting and yachting industries.
Finally, as you are aware, we are currently undergoing a MONEYVAL evaluation, and a visit by them is planned for early 2022.
In addition, I also had the honour of helping the Government to draw up and implement its action plan on money laundering for the coming months.
