FATF status

Monaco is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

In June 2024, Monaco made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in December 2022, Monaco has made significant progress on several of the MER’s recommended actions including by establishing a new combined financial intelligence unit (FIU) and AML/CFT supervisor, strengthening its approach to detecting and investigating terrorism financing, implementing targeted financial sanctions and risk-based supervision of non-profit organisations. Monaco will continue to work with FATF to implement its action plan by: (1) strengthening the understanding of risk in relation to money laundering and income tax fraud committed abroad; (2) demonstrating a sustained increase in outbound requests to identify and seek the seizure of criminal assets abroad (3) enhancing the application of sanctions for AML/CFT breaches and breaches of basic and beneficial ownership requirements; (4) completing its resourcing program for its FIU and strengthen the quality and timeliness of STR reporting; (5) enhancing judicial efficiency, including through increasing resources of investigative judges and prosecutors and the application of effective, dissuasive and proportionate sanctions for money laundering; and (6) increasing the seizure of property suspected to derive from criminal activities.

Compliance with FATF Recommendations

The last Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Monaco was undertaken in 2022. According to that Evaluation, Monaco was deemed Compliant for 4 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Monaco has an open economy characterized by a high standard of living and low unemployment, with no personal income tax for foreigners and Monegasques living and working in the Principality. The economy is primarily driven by sectors such as scientific and technical activities, financial services, and tourism, contributing to a GDP of $7.77 billion in 2021, which marked a significant recovery post-COVID-19.

Monaco has an open investment climate that is highly welcoming to foreign investors, offering various tax incentives and no personal income tax for foreigners residing and working in the Principality. The government closely monitors economic activities, requiring prior approval for foreign companies to operate, while also providing support through dedicated business offices to assist new investors. Additionally, Monaco's customs union with France ensures compliance with EU customs laws, enhancing its attractiveness as a business destination.