For several months now, the Register of Beneficial Owners of Monégasque companies has been unusually busy. A continuous stream of company directors has passed through the small office at the heart of the Business Development Agency.

"It's fine today, but last time the line was snaking around," said a well-dressed company director in December 2023. But the transparency exercise, which is aimed at listing the true owners of companies behind possible frontmen, is annoying some. "Now we want to know how you comb your hair in the morning and your shoe size," sighed one director, as he waited for his turn.

This activity is the result of a wider campaign by Monaco's authorities, who are seeking at all costs to avoid joining the "grey list" of countries considered deficient in the fight against money laundering. This is because Monaco is under threat of having its reputation as an international financial center downgraded, and could find itself in the same category as the United Arab Emirates, Gibraltar and Bulgaria.

The warning shot has come from Moneyval, a Council of Europe body tasked with assessing the level of compliance and effectiveness of anti-money laundering and counter-terrorist financing measures. While its assessment report on Monaco, published in December 2022, recognized the progress and efforts made by the principality, it also pointed to a series of "deficiencies," "weaknesses," "shortcomings," and criticized the "absence of a proper risk analysis." Monaco fell short on many of the dozens of evaluation criteria contained in the report.

According to Moneyval, the principality suffers from "its international profile, particularly through the banking and financial services it offers," making it a "prime target for suspect financial flows." Monaco is prized by many criminals as a place for laundering many of the world's crimes, in particular tax fraud, embezzlement and corruption. A recent example is the concealment of Russian assets in Monaco since Russia's invasion of Ukraine.

"The principality is determined to pursue the implementation of Moneyval's recommendations in order to comply with the most demanding international standards," the head of the government, Pierre Dartout, was quick to announce following the publication of the report. Since then, a 12-month observation period has begun, during which Monaco must demonstrate the efforts it has made to comply with international rules, and therefore avoid finding itself on the "grey list" of jurisdictions subject to enhanced surveillance. The decision will be taken in 2024 by the Financial Action Task Force (FATF), the intergovernmental body responsible for combating money laundering and the financing of terrorism.

You have 65% of this article left to read. The rest is for subscribers only.