Monaco Private Banking - Confidentiality and the drive against money laundering - Private Banking, bank and finance in Monaco Monte-Carlo

Confidentiality and the drive against money laundering

The principal rules governing the banking industry in the Principality of Monaco with regard to confidentiality and efforts to combat money laundering, criminal activities and terrorism are described below.

1. Confidentiality of information collected by banks and portfolio management companies

Managers and employees of banks operating in the Principality are bound by the rules of professional secrecy. A breach of these rules may be prosecuted under the provisions of Article 308 of the Penal Code.

This commitment is designed to protect customers’ interests and create the confidence required for the banking sector to operate effectively. In their relationships with depositors and borrowers, banks obtain extensive information on customers’ financial status, business affairs and private lives. They have a duty to preserve the confidentiality of all information concerning transactions—notably investment activities—and accounts (existence, balances, etc.). The same rules apply to portfolio management firms.

As in all countries with an organized financial system, professional secrecy does not apply to information requested by the banking industry’s supervisory authorities, who themselves are bound by secrecy rules, or by local legal authorities involved in a criminal investigation.

Pursuant to the 1963 tax treaty between France and Monaco, the only other exception to professional secrecy concerns persons with France as their fiscal domicile.

2. The drive against money laundering

For many years now, the Principality of Monaco has taken an active approach to combating organized crime and money laundering. Two specific laws deal with these issues:

• Law no. 1.161 of July 7, 1993, which defines the offense of money laundering.
• Law no. 1.162 of July 7, 1993, which sets out the reporting requirements governing financial institutions, notably with respect to Service d’Information et de Contrôle sur les Circuits Financiers (SICCFIN), the regulatory body responsible for monitoring money laundering.

In 2000, Association Monégasque des Banques published for its members a set of industry recommendations as strict as those prevailing in the world’s major banking sectors. The document sets out the obligations and diligence required of Monegasque financial institutions with regard to identifying and knowing their customers and monitoring capital movements.