Law no. 1.549 of July 6, 2023 adapting AML/CFT-P legislation was published in the Journal de Monaco on July 14, 2023. It mainly amends law n° 1.362 of August 3, 2009 on LCB/FT-P-C.
This text was adopted by the National Council on July 6, 2023. It is Part I of a legislative reform aimed at adapting Monegasque texts to the recommendations of the Report drawn up by the MONEYVAL Committee.
The main changes are as follows:
Supervisory authorities
- The Monegasque Financial Security Authority (“AMSF”) is the new independent administrative authority replacing SICCFIN, and is the supervisory authority for all regulated professionals excluding lawyers.
- The AMSF has three functions: financial intelligence unit, supervision and sanctioning power.
- The AMSF may object to the appointment or renewal of the appointments of directors and shareholders of regulated professionals (excluding notaries, bailiffs and lawyers), if it finds that they do not meet the requisite conditions of good repute, and enjoins them to take all measures to comply with this objection.
- The Conseil de l’Ordre des avocats-défenseurs et avocats is the authority responsible for supervising and ensuring the proper application of the AML/CFT law by lawyers. This authority, which now also has the power to impose sanctions, is required to issue an annual report on lawyers’ activities relating to the application of the law and guidelines.
Obligations relating to beneficial owners
- Beneficial owners are now defined as both the persons who own the company (threshold to be defined by sovereign ordinance, currently set at 25%) and the natural persons who have effective control over the company or legal structure (i.e.: the power to bind the company irrespective of the shares held in it).
- Associations, foundations and federations of associations are now required to provide the Department of the Interior with information on their beneficial owners, and to update this information regularly.
- Commercial and non-trading companies, as well as NPOs, are required to designate a person responsible for basic information and information on their entity’s beneficial owners. This person must be :
- Resident in Monaco and chosen from among their partners, staff or directors; or failing that
- One of the following reporting persons: TCSP, legal counsel, MFO, chartered accountant or certified accountant, notary or lawyer.
Non-trading companies without a deposit account in Monaco are obliged to appoint one of the persons listed in 2).
Politically exposed persons & persons linked to an international organization
- Persons who hold or have held an important position within an international organization are subject to increased vigilance.
- Family members and persons known to be closely associated with a Politically Exposed Person are also considered as such (these notions will soon be specified by sovereign ordinance).
- When a Politically Exposed Person has ceased to carry out his or her duties, regulated professionals are required to take into consideration the risk that the said person continues to pose, and to apply appropriate measures, based on an assessment of this risk, until such time as he or she is deemed no longer to pose a risk. As a reminder, the previous law provided for declassification of PEP status at least 12 months after cessation of functions.
Risk-based approach and reinforced vigilance
- The National Risk Assessment (NRA) must be integrated into the risk analysis at the outset and throughout the business relationship.
- Enhanced vigilance measures must be put in place for risks identified by the Government of Monaco and the relevant authorities, notably in the National Risk Assessment.
- When professionals are exposed to the use of new technologies, they must implement appropriate measures to limit the risks.
- New countermeasures / enhanced vigilance measures to be applied when a transaction involves a high-risk state or territory will be detailed by OS.
Communication with the authorities
- The obligation to have a valuation report drawn up by the chartered accountant (article 59 of law 1.362) has been abolished.
- The authorities make selections of procedures obtained from professionals and comment on their regularity. (NB: we remind you that it is compulsory to send your procedures manual to the authorities as soon as it has been drawn up, and then each time it is updated).
- The STRIX questionnaire must be completed by all professionals subject to the law, with the exception of lawyers, within the timeframe and in the form laid down by the Sovereign Order.
- Notaries and bailiffs are now supervised by the AMSF, and must therefore report their suspicions to this authority.
- Professionals subject to the law are required to report to the Direction du Développement Economique any discrepancies between the extract from the UBO register collected from the customer and their own efforts to identify UBOs within 30 days of obtaining the said extract.
Communication with the authorities
- Increased administrative and criminal penalties.
- Disappearance of the CERC and new administrative sanctions process managed entirely by the AMSF or the Conseil de l’Ordre des avocats-défenseurs et avocats
- It is now more difficult to request that the sanction be published anonymously.
- The DDE can now sanction commercial and civil companies if they fail to meet their obligations to register with the BE Registry.
These provisions will come into force on the date set by the Sovereign Order (not yet published), but no later than September 30, 2023.
Pending implementation of the provisions of this law, the CERC remains competent to propose sanctions relating to all controls begun before its entry into force.