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"International financial crime has no place in Monaco"

"International financial crime has no place in Monaco"

The country will soon be evaluated by a Council of Europe authority on its fight against money laundering and terrorist financing.
The director of SICCFIN, Mr. Michel HUNAULT, explains what is at stake.

Is Monaco properly armed in its fight against money laundering and terrorist financing?
This fall, evaluators from Moneyval, a Council of Europe authority, will visit Monaco to assess local compliance with key international standards.
This visit is essential: the reputation of the Monegasque financial place depends on the outcome of the rating.
In the meantime, the Financial Circuits Information and Control Service (SICCFIN) recently invited institutions and the private sector, including the main leaders of the country's economic forces, to a second review of the national risk assessment. Better known in the industry as "ENR".
Objective: to identify, assess and understand the risks and adapt their systems accordingly. On paper and in practice. Michel Hunault, director of Siccfin, lifts the veil on a sensitive subject.

In the autumn, the Principality will be evaluated by Moneyval. What is its role?
Moneyval is one of the specialized groups of the Council of Europe. It is an instrument that monitors obligations in the fight against money laundering and terrorist financing. With its accession to the Council of Europe in 2004, Monaco must submit to the evaluations of Moneyval - but also of Greco(2) - which is based on a methodology: the recommendations of the Financial Action Task Force (FATF).

Hence the national risk assessment, known as "ENR", which is currently being carried out.
What is it all about?
As head of SICCFIN, my role is to coordinate all sectors of activity (financial, real estate, casino, etc.), the public sector and institutions. The ENR is a decisive step since it tends to assess our vulnerabilities in an objective way, what is compliant and what needs to be improved. Afterwards, an action plan will be drawn up. Monaco is a financial center worth 120 billion euros. It is a place that is significant. The idea, with regard to our assessors, is to demonstrate the regulation and prevention operated in our country. For example, in the real estate sector in Monaco, which is number 1 in the world, we must prevent money laundering.
The sanctions can be serious.

What are the threats?
The Principality must not be left without resources to deal with investments or movements that are not transparent or that are the recycling of international organized crime. This type of crime is very mobile. The ways of laundering money and fighting against traceability are constantly evolving. At SICCFIN, a cryptocurrency department has been created.

The first "ENR" had pointed out weaknesses. What has been done since then?
The National Council passed the law in December 2020 to transpose the 5th European Directive on the fight against money laundering, terrorist financing and corruption. With this text, we are in line and we meet the best international standards. In this sense, a sovereign ordinance should soon be published. This will create new obligations. We need to clarify and help those subject to the law (banks, real estate, casinos, etc.) to fully understand the text and comply with it. We will therefore establish guidelines and an action plan.

What is the main stake in all this?
The confidence and reputation of the Monegasque financial place. In the event of non-compliance, an accompanying procedure is triggered. This would be much stricter. We must ensure that this mobilization of Monegasque players results in a satisfactory rating. I am optimistic, there is a common requirement. Everything is being done to work towards this objective.
The other risk is to be placed on the European grey list...
Indeed, the sanctions can be very unfortunate for the reputation and business. In Monaco, you have banks that care about the reputation of their subsidiary companies. There is a lot at stake. We have to work to ensure that the review is satisfactory.
The banking and real estate sectors, as well as the management companies of foreign companies, are the most exposed to the threat. But it seems that the threat extends to gaming and the art market...
All sectors have vulnerabilities and these are identified by the police, justice and SICCFIN services. We have a good grasp of them and we can see them coming. Serious financial and international crime and the products of such crime [drug trafficking, corruption] have no place in Monaco. At the end of the ENR, we will be able to identify recent trends.

Some sectors have pointed out that, under the guise of increased controls, privacy is threatened...
We must stick to the text and nothing but the text and not ask for more than what the obligations call for. Compliance is not the enemy of business. You are not going to ask fifty times for his passport to someone who has been living in Monaco for decades and who wants to buy a property. Not that residents should be exempt from their obligations, but vigilance should be proportional to the profile and the transaction.

...

675
This is the number of suspicious transaction reports reported to Siccfin in 2019, an increase of 15% compared to the previous year. The main professions that have reported this information are banks and financial institutions (580), management companies of foreign companies (23), portfolio management companies (18) or the SBM and the financial company of collection (16).

The sentence
"The stakes of this evaluation by Moneyval are high. Beyond the reputational risk that the Principality could suffer, the consequences of an unsatisfactory evaluation would be unfortunate. It is more important than ever to maintain and even increase our collective efforts."

Jean Castellini, Government Councillor - Minister of the Economy and Finance.

BY THIBAUT PARAT
Published on 28/04/2021 on Monaco Matin

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