CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Monaco

Monegasque criminal law does not impose a general duty to report corporate crimes. Omission offences are primarily focused on crimes against natural persons and cover situations where immediate reporting could prevent or limit the effects of an ongoing offence.

In certain sectors targeted mandatory reporting and cooperation requirements may apply. For instance, criminal and/or administrative sanctions may apply to companies for failure to comply with reporting requirements under:

• The Environmental Code: This includes reporting accidental environmental incidents, management of genetically modified organisms, handling hazardous and medical waste and overseeing transboundary and waste movements.
• The Marine Code: This pertains to reporting pollution, maritime accidents, scientific activities, and the handling of abandoned property or unlawful cargo.
• Law on Digital Security: Individuals with knowledge of decryption keys or cryptographic means used in the commission of any offence must either provide the decryption key to the authorities or implement it themselves. Additionally, operators of critical infrastructure are required to report cyberattacks or incidents affecting the operation or security of their information systems.

In recent years, the Principality of Monaco has introduced and enforces a wide range of Anti-Money Laundering/Counter-Terrorism Financing-Prevention of Corruption (“AML/CTF-P-C”) and international sanctions laws and regulations. These rules apply to numerous companies operating in Monaco and impose strict obligations on proper record-keeping pertaining to the national beneficial ownership registry, internal controls and cooperation with authorities during inspections.

Mandatory AML/CTF-P-C & International Sanctions Reporting:

Companies falling under Monaco’s main AML/CTF-P-C law, include, but are not limited to:

• real estate and property dealers
• multi-family offices
• asset or trust management companies, corporate service providers
• persons habitually providing domiciliation service
• gaming houses and all providers of gambling and betting services
• dealers in high-value goods (including sales or rental of land, sea or aircraft, jewellery, precious metals, art and antiques etc.)
• professionals dealing with digital assets, crypto assets or token offerings
• persons storing or trading art in free ports
• pawnshop dealers and their agents
• sports agents
• insurance companies and intermediaries
• credit institutions and other financial intermediaries etc.

Obliged companies must file a suspicious activity report (“SAR”) where:

• They suspect or have reasonable grounds to suspect that a transaction or attempted transaction:
  • may be linked to the proceeds of crime
  • may involve financing of terrorism
  • may relate to acts of corruption.
• It involves any activity related to the list of “non-cooperative countries” as updated by the Minister of State
• It involves any activity related to the list of entities and individuals targeted by financial sanctions as updated by the Minister of State.

The reporting obligation extends to transactions refused or cancelled by the company’s client, where the refusal itself raises suspicion.

All companies and individuals must immediately and proactively disclose all information on frozen assets and any data that may facilitate the enforcement of asset freezing measures adopted by the Minister of State in line with UN, EU and French sanctions.

The responsibility for reporting varies based on the company's size, type, governance rules, delegations of authority, and specific circumstances.

Obliged entities are required to appoint one or more senior and certified individuals to oversee the implementation of AML/CTF-P-C laws and regulations within the company.

The responsibility for reporting typically falls on management, compliance officers, or those specifically designated to ensure compliance with AML/CTF-P-C laws and regulations.

SARs are addressed to Monaco’s Financial Intelligence Unit, the AMSF on the goAML platform.

Financial sanctions reporting is addressed to the Treasury and Budget Department, who then coordinates with other relevant authorities.

Failure to file SARs on suspicious transactions, on “non-cooperative countries” or on targeted financial sanctions, result in criminal fines between EUR 36,000 to 450,000 or more, which are doubled for repeat offences.

Failure to report information on frozen assets is punishable by a criminal fine ranging from EUR 18,000 to 450,000.

Companies may face additional penalties criminal and/or administrative such as dissolution, prohibition from conducting business and confiscation of assets.

Good-faith reporting is safeguarded, ensuring that no civil, criminal, or disciplinary liability is imposed on any individual or entity that submits a SAR in good faith. This protection applies even if the reported information is ultimately deemed irrelevant, such as in cases of dismissal, acquittal, or closure of an investigation. However, malicious or bad faith reporting may expose the declarant to criminal prosecution, for slanderous denunciation and/or breach of professional secrecy.

Other risks could include self-incrimination. Entities and individuals are criminally liable for money laundering and international sanctions offences if a lack of oversight or control by their organs or representatives allowed the offence to be committed by a person under their authority.

Companies and individuals within the company may be considered, depending on the case, as the main perpetrator, co-perpetrator, or accomplice.

Legal entities, regardless of their country of registration, may be held liable for criminal offences if such offences were:

• committed by their representatives or organs and
• on their behalf (which means for their benefit)

These two conditions are cumulative.

The criminal liability of a company does not exempt individuals who acted as co-authors or accomplices from being held criminally liable, and vice versa. This includes responsibilities for failure to report, obstruction of an investigation, or the transmission of false or misleading information.

Accessory liability may also encompass internal or external professionals who misuse their advisory role or interfere with the company’s risk-based compliance systems to bypass or neutralise legal obligations.