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Monaco added to money laundering 'gray list'

June 28, 2024

The Financial Action Task Force (FATF) watchdog said it had added Monaco and Venezuela to a list of countries with deficiencies in countering money laundering and terror financing. Jamaica and Turkey were removed.

https://p.dw.com/p/4he8h
Hercules Port in Monaco
The city-state of Monaco was added to a list of jurisdictions deemed as having 'deficiencies' in fighting money launderingImage: Valery Hache/AFP

A global anti-money laundering watchdog, the Financial Action Task Force (FATF), said on Friday it had added Monaco to a list of countries "under increased monitoring."

Venezuela was also added on Friday, while Turkey and Jamaica were removed from the same list.

Why was Monaco added to the FAFT's gray list?

The Paris-based FATF monitors efforts by over 200 countries and jurisdictions to prevent money laundering and the financing of terrorism, adding them to its "gray list" if it detects "strategic deficiencies."

A total of 21 countries are on the gray list, while a separate "black list" includes countries and territories deemed as high-risk jurisdictions, including North Korea.

Monaco attracts wealthy people due to a lack of income and wealth taxes.

The small western European principality already implemented a series of policies after the Council of Europe's anti-money laundering body targeted Monaco over claims made against several figures close to head of state Prince Albert II.

The claims led to the 2023 ouster of crown assets chief administrator Claude Palmero.

However, the FATF found Monaco's efforts to be insufficient.

"Despite significant progress achieved since 2022, Monaco needs to address strategic deficiencies," said FATF president Raja Kumar.

In response, Monaco's government said it was committed to getting off the list "in accordance with the planned deadlines."

Turkey makes 'significant progress' 

The FATF said that it welcomed Turkey's "significant progress" in combating money laundering and the financing of terrorism.

Kumar said a FATF team visited Turkey in May and confirmed that Ankara had taken "substantive steps" to improve its anti-money laundering policies, citing multiple investigations by authorities to that effect.

Turkey had been placed on the list in October 2021.

"We succeeded," Turkish Finance Minister Mehmet Simsek wrote on the social media platform X, formerly Twitter.

Vice-President Cevdet Yilmaz said: "With this development, international investors' confidence in our country's financial system has become even stronger. The decision will have extremely positive consequences for the financial sector and the economy."

sdi/msh (AFP, Reuters, AP)