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 combat the activities of organized crime as well as money laundering and terrorist financing.

The laws and regulations in this respect are tightened up regularly and have been assessed favorably by the relevant international organizations:

• Financial Action Task Force (FATF)
• Moneyval (Council of Europe)
• International Monetary Fund (IMF)

In addition, in recent years Monaco has substantially strengthened the staffing and resources of its financial intelligence unit, SICCFIN, which has signed agreements with twenty-four other financial intelligence units and is part of the Egmont Group of 110 financial intelligence units from across the world.

One of the main directives given by H.S.H. the Sovereign Prince when he came to the throne was that Monaco should be at the leading edge of the drive to combat money laundering and terrorist financing.

For its part, the Association Monégasque des Activités Financières provides its members with a set of industry recommendations as strict as those prevailing in the world's major banking sectors. The recommendations were first published in 2000 and updated in November 2004. They set out the obligations and diligence required of Monegasque financial institutions with regard to identifying and knowing their customers and monitoring capital movements.

The AMAF was also the driving force behind the creation – by ministerial decree of June 10, 2002 – of the Association Monégasque des Compliance Officers (AMCO), whose members meet regularly to exchange ideas and develop their expertise in the prevention of money laundering and terrorist financing.