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Monaco's Prince Albert Refutes Money Laundering Claims

Lisa Ugur, Tax-news.com, London

02 August 2000


For some time now the small principality of Monaco - home to rich sporting stars and the jet-set elite - has been plagued with money laundering accusations and allegations, much like its European neighbour Liechtenstein. Monaco has previously shrugged off money laundering charges, which emanate largely from France, but the renewed vigour with which French Finance Minister Laurent Fabius is approaching the issue is beginning to cause concern in Monaco, where it is feared that the French initiative is beginning to dent Monaco's efforts to gain financial respectability as it seeks to join the European Monetary Union.

Leaping to the defence of Monaco is none other than a senior royal, Prince Albert, who categorically denies the accusations from the French government that his Mediterranean principality is an offshore tax haven which invites money laundering and turns a blind eye to it. Albert, heir to the throne, said: 'I am shocked and disappointed by the accusations. They are not based on established facts but on hypotheses and rumours.'

Albert was commenting on France's parliamentary report of June which said that Monaco, because of its banking secrecy laws, lacked the will and means to cooperate in international efforts to fight money laundering and that its loose controls meant huge sums of money could flow easily into anonymous accounts. The report said France's involvement in Monaco's financial institutions cast a shadow over Europe's determination to fight money laundering and urged Paris to break off its relationship with the principality. And this involvement is by no means an insignificant one. France supplies Monaco's chief administrator, most of its senior civil service and its judges, whilst the state-controlled Bank of France is responsible for Monaco banks and the French Treasury supplies a third of Monaco's £330 million annual budget.

No doubt Albert was also spurred on to speak after a Riviera judge in Grasse opened fraud proceedings against a close aide to his father, Prince Rainier. Andre Palmero, Prince Rainier's personal finance manager and head of the Monaco postage stamp authority, faces charges over Monaco's possible involvement in an alleged swindle involving postage stamps. Such a scandal would certainly not do Monaco any favours, particularly in the eyes of the French.

However, Albert seems to take heart from the separate report of the Paris-based FATF, also published in June, which left Monaco off its money laundering blacklist, although it was nevertheless included in the OECD's ensuing list of harmful tax havens. Albert said: 'I think that in the two reports there is confusion between moderate taxation and money-laundering. We have had moderate taxation policies for a long time, which is why I also deny the term of tax haven.' Mr Fabius certainly would not agree. He believes Monaco should clean up its act: 'You cannot have rules for the European Union on one side and contribute to illicit trafficking on the other', he said.

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