PARIS: Global anti-money laundering watchdog the Financial Action Task Force (FATF) said Friday it had added Monaco to a “grey list” of countries subject to increased monitoring.
The action comes despite Monaco having already taken a series of actions after being singled out by the Council of Europe’s anti-money laundering body following a series of unverified claims against figures close to Prince Albert II.
The FATF, a Paris-based organisation which monitors efforts by more than 200 countries and jurisdictions to prevent money laundering and the financing of terrorism, added Monaco and Venezuela its grey list at a plenary meeting held in Singapore.
Grey list nations are considered to have “strategic deficiencies” in countering money laundering and terrorist financing, while however cooperating with the FATF to correct the problems.
Long known as a playground for the rich and famous, Monaco attracts moneyed residents due to an extremely favourable tax regime which include an absence of income and wealth taxes.
“Despite significant progress achieved since 2022, Monaco needs to address strategic deficiencies,” said FATF president Raja Kumar.
Monaco’s government said it is committed to getting off the grey list.
“The principality confirms its determination to implement the latest FATF recommendations set out in the declaration, in accordance with the planned deadlines,” the government of the Mediterranean tax haven said.
The FATF found that Monaco had not taken enough efforts to stop laundering money from fraud committed abroad or moved aggressively enough to seize criminal assets.
It also judged money-laundering penalties to be insufficient and investigators lacked sufficient resources.
In January 2023 the Council of Europe’s anti-money laundering body Moneyval urged Monaco to intensify its efforts in the investigation and prosecution of money laundering. It has since adopted nine laws to toughen its rules and boost its anti-money laundering body, the AMSF.
Local sources have said it has been difficult to apply the measures immediately due to a lack of qualified staff.
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