In the third instalment of Patrick’s series, he turns from principles to practice, examining how regulatory intent is translated into real-world obligations and where interpretation, responsibility and risk truly begin for those subject to the rules…

The grey list and rating agencies

After being placed on the grey list, like countries that have been downgraded in terms of “debt risk”, including France, which will be downgraded by the rating agencies Moody’s, Fitch and Standard & Poor’s, we will go from AAA+ to AA+ and then AA, grades we would have loved to have on our school report cards, because the ratings agencies’ grades go down to D! D stands for default, whereas at school, C for cancre (dunce) is embarrassing enough, and when our teacher writes “P. must make an effort” on our report card, it makes us pull ourselves together. The Principality of Monaco has pulled itself together, and that is to its credit.

In December 2024, Moneyval, the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, published its first follow-up report on the Principality of Monaco, which noted “significant progress in the level of compliance” which led to a favourable reassessment of the 15 Recommendations (FATF rules) covered by Monaco’s request, bringing the total to 39 positive Recommendations out of 40.

In this regard, the Government of Monaco recently published the following statement on its official website:

“This remarkable assessment is the result of a major effort initiated by the Sovereign Prince and led by the Princely Government, with the National Council, all the Monegasque services and authorities involved in the fight against money laundering and terrorist financing, and with the private sector.

On this occasion, the Principality of Monaco also wished to thank Moneyval for the quality of the exchanges and the mobilisation of its teams, both at the level of its Secretariat and of all those who worked on the follow-up report.”

Once again, this is to Monaco’s credit, but it seems only natural that these supranational bodies, whose sources of income remain unclear, should demonstrate positive engagement in exercising their supervisory powers.

Monaco is on the grey list for 2023

What are the implications? What is the coercive power of European institutions?

Being on the grey list essentially means a ban on international SEPA transfers, apart from a value judgement that belongs only to those who feel it.

Has this listing changed anything in the economic, social or even moral balance of the Principality of Monaco? According to the latest report from the Monegasque Institute of Statistics and Economic Studies (IMSEE), not much, as Monaco seems to be doing better than ever, with a GDP of €10.24 billion in 2024, confirming its status as an economic exception.

Is this paradoxical? Perhaps not.

For advocates of anonymity in the context of donation, one of their main arguments was that if donor anonymity were lifted, donors would become scarcer, to the detriment of those waiting for these generous, life-saving donors.

As if clarity, transparency, and an awareness of one’s own reality, strength, and difference from those less fortunate would cause us to disappear, ashamed of ourselves, the opposite is actually true.

Much to the chagrin of those who advocate for anonymity, which no one claims when it comes to giving, donors are still present, even more so, because they are now offered the notion of responsibility and commitment. The same applies to Monaco’s inclusion on Moneyval’s grey list, and any other situation that involves pressure; one must simply take responsibility for one’s actions and voluntarily face up to the situation.

Thus, long before the Principality’s removal from the grey list, and apart from its efforts to achieve this, driven by the sense of responsibility and commitment of its citizens and residents, the grey list in no way prevents strong economic growth, welcoming new residents every year.

Thus, registration based on standards does not prejudge the transparency of its citizens, except in the eyes of others. All you have to do is play the game, be civically harmonious, and politically in agreement with the other members of the group. In this regard, the Principality of Monaco plays the game, and does so beautifully (see below).

The following statement can be found on the Prince’s government website:

“In addition, these legislative measures have been accompanied by the development and implementation of a comprehensive national strategy, improved cooperation at national and international level, the creation of new institutions (Coordination Committee, A.M.S.F., Service for the Management of Seized or Confiscated Assets, etc.), as well as an increase in the number of investigations into money laundering cases, in line with Monaco’s risk profile and improved financial transparency.

This progress is a testament to the strong commitment of all stakeholders to ensuring that the Principality of Monaco complies with international standards in the fight against money laundering, terrorist financing, the proliferation of weapons of mass destruction and corruption.

However, the improvement efforts undertaken by all public and private stakeholders in the Principality are continuing with a common goal: to be removed from the FATF grey list, which requires the implementation of the action plan agreed with the Financial Action Task Force in June 2024. This favourable outcome could be achieved in mid-2026.

Which government departments are authorised to enforce AML/CFT legislation?

In Monaco, the AMSF (Monegasque Financial Security Authority, formerly SICCFIN) combines the roles of supervision and intelligence. Added to this are the Directorate of Judicial Services, the Directorate of Tax Services and the Public Prosecutor’s Office, under the authority of the Minister of State.

In France, the ACPR (Autorité de Contrôle Prudentiel et de Résolution) acts as supervisor, and TRACFIN acts as an intelligence unit. As in Monaco, the Budget Department, the Tax Services Department and the National Financial Prosecutor’s Office are also involved.

These state departments have, to varying degrees, coercive powers in the form of first-degree investigations (investigations and complaints to the public prosecutor’s office), but only magistrates can prosecute, with penalties attached.

On social media, we can read about TRACFIN and young people, the “Habilités” Agathe, 25, Marc, 24.

While youth does not detract from an individual’s qualities, experience is essential to understanding who we are dealing with in the fight against money laundering, or even when it comes to money in general.

When I was a young banker, a client came to the bank’s “stock exchange department” to meet me. We had never met, except through telephone conversations over several months. He was sitting in an office and I went to meet him. I sat down and he asked me my age. A little surprised, I told him. He replied, slightly disappointed, but not too much, “You’re too young to understand what money is.”

We always learn from our clients, and we also have clients who are like us. I later understood the message this client wanted to convey to me. I am still perplexed when I see the age of these young TRACFIN inspectors, described as “skilled”, fighting against “subjects”.

The situation is already unbalanced, if only in terms of semantics.

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.