Monaco is notable for its rigorous approach to anti-money laundering and terrorist financing, requiring regulated entities to file a déclaration de soupçon a suspicious transaction report before, or in exceptional cases, immediately after processing a transaction. This declaration is part of the legal framework established by Law no. 1.362 of 3 August 2009 and subsequent amendments, overseen by the Monegasque Financial Security Authority (AMSF). Understanding how to detect, file, and follow up on these reports is essential for banks, lawyers, real estate professionals, and other obligated actors in Monaco.
Legal Framework for Déclaration de Soupçon
The declaration of suspicion is rooted in topic 36 of Law 1.362, which obliges reporting entities to submit a suspicious transaction report (STR) to Monaco’s FIU (AMSF) when they know, suspect, or have reasonable grounds to suspect that a transaction involves funds linked to money laundering, terrorist financing, proliferation, or sanctions evasion.
Regulated professionals include banks, notaries, accountants, lawyers, estate agents, and luxury goods dealers, among others. These entities must report both attempted and completed transactions which trigger suspicion. A timely STR ensures compliance and enables authorities to act swiftly.
Timing and Conditions for Reporting
Under normal circumstances, Monaco law mandates that the STR be submitted before the execution of the transaction. The reporting entity should state the latest date by which the transaction may still occur.
However, two exceptions allow reporting after execution:
- If postponing the transaction would compromise law enforcement or judicial action.
- If the transaction must proceed immediately for operational reasons.
Types of Suspicion Covered
The law identifies three categories for STRs:
- Funds linked to money laundering, terrorist financing, or proliferation.
- Transactions involving persons or entities from non-cooperative jurisdictions.
- Operations involving individuals or entities under targeted financial sanctions.
Channels for Reporting
Reports must be filed directly with AMSF’s FIU electronically. Lawyers have a distinct pathway: they report to their Bar Association, which then forwards the information to the FIU.
Following Up on a Declaration de Soupçon
After filing, the entity must continue to monitor the situation and promptly submit additional information to AMSF if further data emerges that confirms, refutes, or modifies the initial suspicion.
Confidentiality and Tipping-Off Rules
Maintaining confidentiality is vital. The concept of tipping off is prohibited: entities must neither disclose the existence, content, nor outcome of the STR to the client or third parties.
Institutional Oversight: The AMSF
Established in December 2022, AMSF is Monaco’s dedicated authority for AML/CFT. It consolidates the FIU, compliance supervision, and sanction enforcement under one independent administrative body.
AMSF coordinates across government, regulated entities, and international partners through secure communication networks. It also provides guidance, training, and feedback to reporting entities.
Enforcement and Penalties
Failing to file an STR, filing it late, or disclosing its content can lead to sanctions by AMSF. Regulated entities must also ensure robust AML compliance frameworks, including policies for KYC, internal controls, staff training, and audit trails.
International Context
Monaco’s AML/CFT regime aligns with international standards, notably FATF Recommendations and MONEYVAL evaluations. It supports cross-border cooperation through protected information exchange with other FIUs and law enforcement.
Best Practices for Reporting Entities
- Implement monitoring systems to detect suspicious behavior.
- Train staff on red flags such as unusual transaction patterns and complex corporate structures.
- Ensure electronic STR submission systems are in place and tested.
- Log submission dates and transaction deadlines clearly.
- Update the FIU with new relevant information swiftly.
- Maintain internal documentation while preserving FIU confidentiality requirements.
- Participate in AMSF training and stay current with guidance.
The déclaration de soupçon is a cornerstone of Monaco’s stringent AML/CFT framework. Grounded in legal mandates, it demands proactive disclosure of suspicious transactions, executed with care and confidentiality. AMSF operates as an independent body ensuring these disclosures drive enforcement and safeguard the financial system. For regulated entities, establishing strong internal policies, staff training, and noting exceptional reporting conditions are essential. In doing so, they uphold Monaco’s reputation as a transparent, globally-compliant jurisdiction while contributing to the fight against illicit finance.