The Monegasque banking and financial marketplace, renowned for its conscientious approach and strict confidentiality, has adopted tough ‘know your customer’ legislation. The Act stipulates that the banks and other professionals covered by it must carry out customer checks.
In accordance with the international commitments made by the Principality of Monaco, the Act sets out an enacting term to prevent money laundering and the financing of terrorism and corruption. Act no. 1362, which was adopted in 2009 and completed by Sovereign Decree, states that from the outset of a business relationship between a professional and a customer, the account users must be identified, and all information and documents that might be required to establish the characteristics of said business relationship must be collected.
Customer identification
As regards customer identification, banks have a duty to know their business relationships and to identify them. Such identification may only be performed when an official and valid identity document is provided (documentary evidence) which includes the person’s photograph. The institution must retain a copy of this document. Although there is no comprehensive list of documentary evidence, accepted documents are generally: a valid national identity card, a passport or a Monegasque residence permit. Where the identity document does not show the address, the Act also requires banks to check their customers’ addresses using an alternative document. Institutions must retain a copy of the documentary evidence, whether a water bill, insurance certificate or other document. In addition, the bank must have gleaned any information required from the customer in relation to their financial circumstances and the reasons for which they intend to open the account. It is then asked to gauge the origin, composition and scope of their assets, their activities and economic profile, and the amount and source of their income.
Continued vigilance over accounts and transactions
Once the business relationship has been initiated, the bank must continue to ensure that the various transactions performed are consistent with the knowledge that it has of its customers. It may therefore ask for an update of the identification data that it has collected where it deems such action to be necessary.
