Monaco introduces new measures to fight money laundering, terrorist financing and corruption

Law No.1,462 on the fight against money laundering, terrorist financing and corruption was published on 6 July 2018. Its provisions came into force on 7 July 2018 and are applicable to individuals and legal entities in the Principality.

A Sovereign Ordinance is expected to be published shortly for application of the new legislation.

The new law aligns Monegasque legislation with the 4th Directive (EU) 2015/849 of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. Under the terms of Annex B of the monetary agreement signed between the European Union and the Principality on 29 November 2011, Monaco was required to adopt equivalent provisions to the Directive.

In substantive terms, Monegasque anti-money laundering measures have now been strengthened: the scope of the law has been widened, identification and vigilance obligations have been tightened, and there are now a number of new organisational requirements.

In addition, some noteworthy new measures have been introduced with the creation of:

• A new register of beneficial owners of companies, and a register of beneficial owners of trusts,
• An internal anonymous whistle-blower system, where staff and executives at companies concerned by the legislation are able to report breaches of anti-money laundering rules,
• New administrative penalties and new criminal offences.

In light of Law No.1,462, operators in the Monegasque financial industry will need to update their internal systems to combat money laundering, terrorist financing and corruption, in order to adapt them to the new legislative environment.