Laws No 1.449 and 1.550 of 14 July 2023 and 10 August 2023 respectively on anti-money laundering, applicable to companies as well as foundations and associations, gave rise to new duties, the scope of which will be laid down in sovereign ordinances to be adopted.
It is worth noting that new duties are already emerging and the process of controls is taking shape, right from the creation of the legal entities and companies and on a continuous basis, whenever there is any change to them and until their winding down, thereby providing authorities with precise knowledge of how professionals are keeping up.
Law No 1.550 created a new category of “actors” responsible for the collection, transmission to several national authorities, and retention of essential basic information on legal entities and individuals (effective director, beneficial owner, shareholder, partner) for an extended period of ten years. The “Basic Information Officer” may also be responsible for collecting information on an entity’s beneficial owners, and may be an individual or a legal entity, appointed internally or from outside. Internally, senior executives and the board of directors are subject to increased accountability and must show evidence of having fulfilled various duties regarding the basic information and the declaration of beneficial owners. Externally, the professionals who can undertake this collection duty are: lawyers, notaries, Multi Family Offices, legal, economic or tax advisers, chartered accountants (or auditors), and Corporate Service Providers. The responsible person is indeed an “Officer” who may also perform other functions set out in the same or other laws. Internally this person could be a Compliance Officer, who is also responsible for the collection of basic information, responsible for alerts, the contact officer under the legislation on harassment, and possibly also a Data Protection Officer pursuant to the legislation on data protection (contained in Law No 1.165 of 23 December 1993, as amended, which is expected to change soon).
Liability implies a thorough governance of the management bodies, the board of directors, or a group over all these appointments and new duties. Liability also implies insurance, and the insurance cover for both individuals and legal entities is expected to expand in the future ; the concept of liability is included in various legal texts. It can be professional liability as well as civil, administrative or criminal liability. The responsibilities of the actors tighten up controls by both administrative and judicial bodies, which are assigned new duties of verification, sanction, control of registers and disputes ; the latter tasks are entrusted to the Court of First Instance.
What are the practical consequences of creating a new legal category of actors ?
Sanctions can be imposed by the new independent administrative authority, the Monegasque Financial Security Authority, as well as by the Business Development Agency and the Ministry of Interior (up to EUR 100,000).
Alongside these new functions (responsibility for basic information, internal contact officer for alerts), existing actors see an increase in their duties and responsibilities. Besides the Compliance Officer, the same applies to liquidators of commercial or civil companies established in the Principality of Monaco. Liquidators may be subject to criminal sanctions (six months imprisonment and a fine of EUR 18,000 to EUR 90,000) if they do not properly retain the information they are responsible for as part of the liquidation.
A new process of responsibility has therefore been set in motion regarding the creation, change, cessation of an activity in the Principality through the creation of new functions, driven by this desire to have better means of combating fraud.
The internal organisation of a company, its control, and primarily by its own governing bodies, have become essential criteria in the setting up an activity in the Principality, especially when this activity is subject to the anti-money laundering provisions. Technical and human resources have been stepped up. The legitimate interest of an organisation must be proven. Major future developments will be detailed in the implementing legislation.
