An IMGW News Report
Once famed for discretion and allure, Monaco now finds itself under the watchful eye of global regulators. The FATF’s decision to add the city-state to its grey list raises uncomfortable questions about compliance, transparency, and wealth’s preferred havens.
The Financial Action Task Force (FATF), the international standard-setter on anti-money laundering (AML) and counter-terrorism financing (CTF), has added Monaco to its grey list – a roll-call of jurisdictions deemed to have strategic deficiencies in their regulatory frameworks. Venezuela also joined the list at the organisation’s June 2024 plenary, while Jamaica and Türkiye were granted reprieve and removed.
“This marks an embarrassing reversal for the Riviera microstate, whose opulence has long attracted the world’s wealthy”
This marks an embarrassing reversal for the Riviera microstate, whose opulence has long attracted the world’s wealthy. Though Monaco has no income or wealth taxes – part of its perennial allure – its efforts to shore up financial transparency have fallen short in the eyes of international monitors. Despite what FATF president Raja Kumar called “significant progress since 2022,” the watchdog concluded that Monaco had yet to remedy core structural weaknesses.
The decision follows growing international scrutiny. In 2023, MONEYVAL, the Council of Europe’s AML body, raised red flags over alleged governance failures involving figures close to the principality’s ruler, Prince Albert II. This culminated in the departure of Monaco’s chief asset manager, Claude Palmero. The FATF’s latest ruling appears to echo these broader concerns, noting the need for “strategic improvements” despite prior reforms.
Monaco’s government, in response, affirmed its “full commitment” to meeting FATF standards within the required timelines. Yet the listing carries reputational costs. Inclusion on the grey list does not trigger sanctions, but it signals heightened monitoring – often enough to unsettle investors, banks, and financial intermediaries wary of risk exposure.
Meanwhile, Türkiye’s removal from the list offers a case study in rehabilitation. Following a May 2024 on-site review, the FATF acknowledged Ankara’s “substantive steps” to enhance enforcement, bolstered by a flurry of investigations into financial crimes. Jamaica too earned praise for remedying earlier deficiencies.
As of June 2024, the FATF’s grey list comprises 21 jurisdictions, including Nigeria, South Africa, and the Philippines. Monaco’s presence among them underscores that even gilded enclaves are not immune to the exacting gaze of global financial oversight.
