In the second instalment of Patrick’s series on money laundering and financial compliance, he examines the role of the FATF and MONEYVAL, tracing how international standards evolve into binding legal frameworks and reshape the responsibilities of states, institutions and individuals alike...
The FATF and Moneyval
In 1989, the fight against money laundering took on an international dimension when a group of countries and international organisations created the Financial Action Task Force, or FATF. The FATF’s mission is to develop international standards to prevent money laundering and ensure their adoption.
In support of the FATF’s mission, a committee of experts on the evaluation of measures to combat money laundering and terrorist financing was created in 1997 within the Council of Europe. This committee is known as Moneyval, a contraction of “money evaluation” or, rather, “morally acceptable money”.
The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) is a permanent monitoring body of the Council of Europe responsible for assessing compliance with the main international standards on combating money laundering and terrorist financing and assessing the effectiveness of the application of these standards, as well as making recommendations to national authorities on the improvements needed to their systems.
Through a dynamic process of mutual evaluation, peer review and regular monitoring of its reports, Moneyval aims to improve the capacity of national authorities to combat money laundering and terrorist financing more effectively. Weapons of mass destruction have also been included, while we’re at it.
From standard to law.
In the name of the law? It is an oxymoron for a judge to say “in the name of the law” because he is the law, just as the police are the law, they “represent” it in our common language, but these sovereign professions are “Laws”.
“In the name of the law” should in fact only be uttered by those who are not the law. Neither judges nor police officers should use the term “in the name of the law” because they are the law, they represent it.
Josh Randall (see below) and the subject, on the other hand, can say “in the name of the law” because they are not the law: one is a bounty hunter, the other a merchant.
It is like belief, contrary to what Saint Thomas thinks, “I only believe in what I see”.
see”, we can and should, on the contrary, reasonably believe in what we do not see.
What we see and experience does not need to be believed; it is simply lived experience, and that is why believers believe, perhaps in something incredible to some, but the only true belief is external to their lives.
The subject is therefore more legitimate than anyone else to speak “in the name of the law” when he or she issues a Declaration of Suspicion (see below).
Standards and not laws – Not exactly…under the sun exactly?
The rules that regulated entities must follow (see below) are standards, specifically those enacted by the FATF and applied by Moneyval. Moneyval is based on several conventions, standards and laws. The 40 FATF recommendations, which draw their source from: The 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention); the United Nations Convention against Transnational Organised Crime of 2000 (Palermo Convention); the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (Strasbourg Convention).
In addition, there are nine special recommendations from the FATF on terrorist financing and several other related United Nations instruments (the International Convention for the Suppression of the Financing of Terrorism, adopted by the United Nations General Assembly, and the relevant United Nations Security Council resolutions on the freezing of assets related to terrorism).
Finally, European laws, Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, and Directive 2006/70/EC of the Commission of 1 August 2006 laying down implementing measures for Directive 2005/60/EC of the European Parliament and of the Council as regards the definition of politically exposed persons and the technical conditions for application. These European conventions, standards and directives are applied through due diligence procedures which, in the case of Monaco, involve more than 358 control, analysis and observation points, as set out in a National Risk Assessment (NRA) report. These standards are transformed into laws through the meticulous and laborious intervention of the legislators of each State concerned.
A brief digression: The transition to the euro or the “smuggler’s paradox”
While the fight against money laundering has been in full swing since the early 1990s, and even more so with the creation of Moneyval in 1997, in 1999, during the transition from the franc to the euro, the 500-franc note, the famous “Pascal”, was replaced by a 500-euro note. Through the conversion mechanism, for the same amount, a “smuggler’s” load is seven times lighter and seven times less bulky. Any elegant smuggler will thank the European Commission and the ECB.
Where tax fraud (which does not involve physical money) should not be confused with tax evasion, we can thank the supervisory and regulatory authorities for working in the opposite direction to what is required of subjects. “Are you serious?” young people would say to the European regulatory authorities.
On the other hand, and following a path of moral consistency, if there is such a thing, the United States, as part of its fight against tax evasion and money laundering, had already put an end to the circulation of 500- and 1,000-dollar bills in 1969, in line with the upcoming BSA Act of 1970 (see above).
European standards and their implementation in the laws of the Principality of Monaco.
Since being placed on the grey list, the Monegasque legislature has, in the space of sixteen months, published four laws comprising 481 articles, which have led to the amendment of 11 laws, one Sovereign Order and three Codes, and have required the drafting of numerous implementing texts. Prior to the publication of Monaco’s mutual evaluation report in January 2023, five laws were adopted in December 2022, comprising a total of 73 articles that led to the amendment of two laws and two codes.
Patrick LAURE
Secrétaire Particulier
+33 6 35 45 27 02
laurepatrick@wanadoo.fr
**The information provided in this article is for general informational purposes only and does not constitute legal advice. It is not intended to create an attorney-client relationship. Laws and regulations vary by jurisdiction and may change over time. Readers should consult a qualified legal professional for advice specific to their situation. The author and publisher are not responsible for any actions taken based on this information.
