Further to the adoption by the Moneyval Committee of the Council of Europe in December 2007 of the report of the third joint evaluation round on the Principality, the Government engaged in a reflection with a view to creating a legal and regulatory framework even better suited to current requirements in the fields of the fight against money laundering and the financing of terrorism.
A draft amendment of the law, adopting the various recommendations set out in the Action Plan prepared by the Moneyval Committee as a conclusion to its evaluation report and including the measures defined by the Third European Directive on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing (2005/60/EC), was therefore prepared. This process to revise the law is part of the Principality Government’s forward-looking policy, which has been in effect for a number of years, related to the fight against money laundering, the financing of terrorism and corruption.
Recommendations to support the identification and prevention of risks related to money laundering
It also intends to include in a legal and regulatory framework a certain number of the AMAF recommendations and practices for Monaco’s financial centre to support the identification and prevention of risks related to money laundering, the financing of terrorism and corruption. The Government also intends to associate market professionals from various relevant business sectors, whether financial or not, in the drafting of the text by collecting their opinions beforehand and, to the greatest extent possible, taking their comments into consideration.
For a greater compliance with the recommended criteria
Our legal framework to fight money laundering and the financing of terrorism, including Law No. 1.162, which has already been amended a number of times, must be supplemented to guarantee greater compliance with the criteria recommended by international reference bodies, such as the FATF.
Among the main measures proposed and in addition to the various obligations set out in Law No. 1.162 and Sovereign Order No. 11.160, the following should be noted:
- the extension of the obligation to declare suspected breaches defined by Article 218-3 of the Criminal Code, as well as acts of corruption:
- extension to all the professionals listed of obligations formerly reserved to financial institutions alone, and, in particular, certain non-financial professions become subject to additional preventive measures;
- details added to the identity identification and verification measures for individuals, corporations and legal entities;
- a more concise definition of the concept of an actual beneficial owner;
- the obligation to be constantly vigilant in business relations, in particular: by examining the transactions or operations concluded throughout this business relationship and, if necessary, the origin of the funds, so as to ensure that said transactions or operations are coherent with the knowledge the professionals have of their clients, their social and economic background, their business activities and their risk profile, by updating the documents, data and information collected on the occasion of this examination;
- the obligation to submit to an attentive examination any operation or transaction that professionals believe is particularly likely to be related to money laundering or the financing of terrorism, due to its nature or complex or unusual character in light of the client’s business and the circumstances surrounding said business, in particular in the absence of an obvious financial justification or legal objective;
- the reinforcement of the role of individuals appointed as SICCFIN correspondents within institutions and those responsible for the prevention of money laundering, the financing of terrorism and corruption;
- the ability to apply administrative monetary penalties for non-compliance with the laws related to money laundering;
- for a certain number of relevant professions, the preparation by a chartered accounted of an annual report to assess the application of the law and the measures taken for the execution thereof to be sent thereafter to the SICCFIN;
- the obligation to adopt an internal supervisory system to rapidly detect atypical transactions, often symptomatic of an increased risk, which, in particular, must: cover all of the client accounts and transactions; be based on precise, relevant criteria, defined by the institution, that specifically take into account the characteristics of the services and products it offers and the specifics of the clientele it targets;
- produce written reports describing the atypical transactions identified and the criteria on which it bases this opinion;
- be automated, unless the nature and volume of the transactions to be supervised do not require automation;
- be the subject of a periodic review of its appropriateness in order to adapt it, if needed, to the evolution of the business, its clientele or environment.
This reengineering programme for the current structure has entered the legislative stage, as it was submitted to the National Council in a public session on April 1st, 2009 and has already been the subject of debate between the Government and the representatives of this Council.
The draft may be consulted on the National Council’s site: www.conseilnational.mc
