FATF Status

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

Latest FATF Statement - 21 February 2025

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 follow up Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Monaco was undertaken in 2024. According to that Evaluation, Monaco was deemed Compliant for 7 and Largely Compliant for 32 of the FATF 40 Recommendations. It was remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

In response to corruption concerns, France implemented significant legislative measures, including the 2017 law aimed at restoring confidence in public life and the "Loi Sapin II," which established an anti-corruption agency and required lobbyists to register. These laws enhance transparency by mandating the publication of asset declarations for government officials and promoting whistleblower protections. France ranks 21st out of 180 countries on Transparency International's 2022 corruption perceptions index, and the Agence Francaise Anticorruption plays a key role in preventing and addressing corruption.

Monaco's economy is characterized by a strong emphasis on services, particularly in banking, insurance, and tourism, which collectively account for a significant portion of its GDP. The principality benefits from its customs union with France, allowing it to participate in the EU market system, while its exports mainly consist of luxury goods such as jewelry, perfumes, and cars. Despite its small size, Monaco maintains a stable economic environment, attracting foreign investment and contributing to its reputation as a wealthy and prosperous location.

Monaco has a favorable investment climate characterized by its stable economy and strong ties with France, which facilitates foreign investments. The country benefits from a lack of restrictions on foreign ownership, making it an attractive destination for investors, particularly in sectors like tourism and luxury goods. Additionally, Monaco's strategic location and high standard of living further enhance its appeal to international businesses.