These amendments contribute to the objective of global transparency of the economic and financial environment of the European Union, in which the Principality of Monaco participates, without being a member thereof. They have as their objectives:
- transposing Directive (UE) 2018/843 of the European Parliament and the Council of May 30th, 2018, known as the “5th Directive”;
- clarifying certain provisions of the legal framework, so that they are adjusted in the light of Directive (EU) 2015/849 of the European Parliament and of the Council of May 20th, 2015 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, known as the “4th Directive”, and FATF recommendations
- implementing legislation in line with Regulation (EU) 2018/1672 of the European Parliament and of the Council of October 23rd, 2018 on controls over cash entering or leaving the European Union.
Law n°1.503 and Order n°8.634 bring to the existing legislative landscape certain novelties, as well as clarifications, in particular as regards duties of vigilance (simplified and reinforced), as well as the procedures for internal control of the organizations concerned.
Law n°1.362’s is extended to include exchange service providers between virtual currencies and legal tender, as well as custody service providers for virtual currencies and assets.
Business relationships and transactions involving high-risk countries are targeted by the inclusion of provisions to collect more information and documentation when any such transaction is carried out.
Groups of companies must now introduce consolidated supervision, with audits to be carried out by the parent company over its subsidiaries and branches. In addition, specific procedures for the exchange of information within the group must be put in place.
Consultation of the register of beneficial owners is now mandatory when fulfilling the obligations of identification and verification of clients. It is therefore accessible to organizations and persons subject to Law n°1.503, to enable them to carry out their due diligence. Moreover, the latter are obliged to declare any discrepancy between the information contained in the register and that of which they are aware.
Anti-money laundering, the financing of terrorism and corruption legislation has been significantly amended by the introduction of Law n°1.503 and Order n°8.634, and requires reporting entities to review and update their internal procedures.
For the future, Directive (EU) 2018/1673 of the European Parliament and of the Council of October 23rd, 2018 on the fight against money laundering by means of criminal law should be transposed into Monegasque law by December 31st, 2021 at the latest. This transposition should bring significant changes from a criminal perspective.