The directive 2015/849 of May 20th, 2015, called 4th anti-money laundering directive has been integrated, by sovereign order No. 5.713 of February 8th, 2016, in the Appendix B of the Monetary Agreement concluded by Monaco and the European Union of November 29th, 2011.
As such, the Principality of Monaco is required to adopt equivalent measures to those of the 4th Directive. It is, in this context, that the draft Bill No. 972 of October 24th, 2017 has been published.
This project strengthens the anti-money laundering mechanism by amending (i) the previous Monegasque AML regulation, (ii) the Bill No. 56 on the foundations, (iii) the Bill No. 214 on the trusts, the (iv) Bill No. 1.355 on the associations and associations’ federations and finally (v) the criminal code.
The principles modifications of the Law No. 1.362 are as followed:
- The actors falling in the scope of the anti-money laundering regulation is widen (electronic money institutions, gambling service providers, art dealers and high-value object merchants, advisers and intermediaries in crowd funding and sports agents) (Article 2);
- The replacement of the exemption from due diligence for certain low risks clients by a simplified duty of due diligence (Articles 11 and 12);
- The prohibition to establish a correspondent relationship with a shell credit institution or a shell financial institution (Article 16);
- The uniformization of the legal regime applicable to politically exposed people (no distinction between national and foreign PEPs) (Article 17);
- The identification of beneficial owners by those subject to the fight against money laundering is strengthened (Articles 21 and 22);
- The obligation to nominate an agent responsible for the preservation of documents and information that may be the subject of a request from SICCFIN for professionals stopping their activity on the Monegasque territory (Article 26);
- Flexibility and expansion of intra-group communication of anti-money laundering relative’s information (Articles 28 and 29);
- The setting up of an internal warning system when failure to fulfill the obligations in the fight against money laundering (Article 30);
- The prohibition to pay in cash goods or services worth more than 10,000 euros (Article 35);
- The right of SICCFIN’s opposition following a declaration of suspicion is set to 5 days (Article 37);
- The list of the possible recipients of the information pertaining to the existence contents of a suspicious transaction report is extended (Article 45);
- The setting up of tools allowing to strengthen the cooperation between the SICCFIN and the judicial authority (Article 49);
- The significant reinforcement of the powers of SICCFIN (Article 53 and following) and of the international cooperation;
- The creation of an independent Commission of SICCFIN and of the Minister of State in charge of establishing a proposal for an administrative sanction while preserving the defense’s rights (Article 64).
In criminal matters, the principle amendments of the draft Bill are:
- The creation of five new criminal offenses for breaching the provisions of the Bill No. 1.362 (Articles 74 to 78);
- The redesign of the corruption’s offense provided in article 113-4 of the Penal Code and the redefinition of the criminal association to include further criminal offenses;
- The creation of a presumption of money laundering when the conditions of operations can have no other justification than hiding the origin or the beneficiary of these goods, capital or income (Article 17 - Book IV).
In addition to these many modifications that will necessarily have an impact in the implementation of the anti-money laundering process, the principal measure of this draft Bill is the creation of two registers kept by the Monegasque Department of Economic Expansion: a "Registry of Beneficial Owners" and a "Registry of Trusts".
With regard to the Registry of beneficial owners, those subject to the fight against money laundering in Monaco will be required to provide the Department of Economic Expansion with a certain amount of information on beneficial owners. These information will be listed in the Registry of Beneficial Owners, accessible by public authorities, professionals subject to the fight against money laundering and everyone justifying a legitimate interest.
With regard to the Registry of Trusts, it is the trustees who will be required to inform the Economic Development Department of the information relating to the identity of the constituent, the trustee(s), the protector (if any), the beneficiaries and any physical person exercising an effective control over the trust. This information will be accessible by the public authorities under conditions that are still to be determined by Sovereign Order.
There is no doubt that the adoption of this draft Bill will deeply change the practices of the Monegasque marketplace in the fight against money laundering. As a reminder, the Principality of Monaco committed to "transpose" equivalent measures to the 4th anti-money laundering directive before June 30th, 2017. The adoption of this draft law (subject to the modifications of the National Council) should thus expected to come out very soon.