Monaco Looking To Clean Up Its Image

by Ulrika Lomas, Tax-News.com, Brussels

03 July 2001

Monaco has been working hard to shed its image as a safe hiding place for money launderers and tax evaders, and the Counselor for Finance and the Economy can smell success. 'I think today the principality's policy is very clear, which is to firmly condemn any type of money laundering,' said Franck Biancheri recently.

Although the principality is home to just 32,000 people, there are 44 banks and 25 asset management firms established there, handling at least $47.6 billion in deposits. However, the inclusion of the jurisdiction on the OECD blacklist, a warning from the Financial Action Task Force, and a damning report last year which plunged relations with France into turmoil, have all served to sully Monaco's reputation, and officials have spent the last year trying to clean it up again.

Measures undertaken have included doubling the staff of its financial transactions monitoring unit, cooperation agreements signed since October with Spain, Belgium, Portugal, and Luxembourg, and the tightening of laws relating to suspicious transactions.

M. Biancheri has said that he hopes that the initiatives taken will be sufficient to ensure removal from the OECD blacklist later this year, and believes that a forthcoming audit by the French Finance Ministry will give the principality a clean bill of health. However, he insisted that there would not be a widespread reform of Monaco's tax laws, and is resisting pressure from the EU to lift its banking secrecy laws as part of a plan to tax savings. 'For us there should be no confusion between money laundering and the tax system,' he explained. 'We have a soft tax system, which is adapted to our needs.'

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