Monaco Country Summary

FATF Status

Monaco is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 February 2025

In June 2024, Monaco made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in December 2022, Monaco has made significant progress on several of the MER’s recommended actions including by establishing a new combined financial intelligence unit (FIU) and AML/CFT supervisor, strengthening its approach to detecting and investigating terrorism financing, implementing targeted financial sanctions and risk-based supervision of non-profit organisations. Monaco will continue to work with FATF to implement its action plan by: (1) strengthening the understanding of risk in relation to money laundering and income tax fraud committed abroad; (2) demonstrating a sustained increase in outbound requests to identify and seek the seizure of criminal assets abroad (3) enhancing the application of sanctions for AML/CFT breaches and breaches of basic and beneficial ownership requirements; (4) completing its resourcing program for its FIU and strengthen the quality and timeliness of STR reporting; (5) enhancing judicial efficiency, including through increasing resources of investigative judges and prosecutors and the application of effective, dissuasive and proportionate sanctions for money laundering; and (6) increasing the seizure of property suspected to derive from criminal activities.

Compliance with FATF Recommendations

The last follow up Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Monaco was undertaken in 2024. According to that Evaluation, Monaco was deemed Compliant for 7 and Largely Compliant for 32 of the FATF 40 Recommendations. It was remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Monaco experiences minimal issues with human trafficking, smuggling, and organized crime, largely due to its strong policing and governance. While there are isolated incidents of drug trade and cyber-attacks, the overall criminal landscape is characterized by foreign actors, particularly from transnational crime groups. The principality has made strides in enhancing its financial systems and anti-corruption measures, although civil society remains relatively weak.

Monaco has an open economy characterized by a high standard of living and low unemployment, with no personal income tax for foreigners and Monegasques living and working in the country. The economy is driven by sectors such as scientific and technical activities, financial services, and tourism, contributing to a GDP of $9.12 billion in 2022. The Principality also benefits from various tax incentives for corporations and new businesses, fostering a favorable environment for foreign investment.

Monaco has a favorable investment climate characterized by an open economy that encourages foreign investment, with no personal income tax for foreigners and various tax incentives for corporations. The government closely monitors economic activities, requiring prior approval for foreign companies to operate, while also providing support through agencies like the Monaco Business Office. Additionally, new companies can benefit from significant tax exemptions, enhancing the attractiveness of Monaco as a destination for investors.