Monaco on the Grey List: Time for an action plan and reassurance
The Principality is doing everything in its power to get off the grey list in 18 months © Pixabay
Monaco is stepping up its efforts to get off the FATF grey list after significant progress, recognised by that organisation, in the fight against money laundering and terrorist funding.
Last Wednesday, the Monegasque Coordination and Monitoring Committee for the national strategy to combat money laundering, terrorism financing, the proliferation of weapons of mass destruction and corruption, met to discuss the action plan recommended by the Financial Action Task Force (FATF).
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This meeting follows the announcement on 28 June 2024 that Monaco had been added to the grey ‘increased monitoring’ list of the FATF, the international organisation for combating money laundering and terrorist funding. Through its press release, it urged the Principality to make efforts in particular with regard to money laundering and tax fraud committed abroad, the seizure of criminal assets abroad, the level of resources allocated to magistrates, the application of effective and dissuasive sanctions, and the increased seizure of assets suspected of originating from criminal activities.
The government organised a press conference on 1 July to address the concerns of the various stakeholders. Here are three salient points in what is a complex situation.
1. Progress recognised by the FATF
The FATF statement stresses a number of “significant advances” made by Monaco, notably in strengthening its resources to combat terrorism funding, the creation of a new supervisory and financial intelligence authority, the introduction of targeted financial sanctions and the supervision of non-profits based on risk assessment.
At the press conference Pierre-André Chiappori, Minister of Finance and the Economy, stressed a “very rare” and ” unusually favourable situation” since in six years and out of some forty countries, only two countries have been praised for their progress. According to him, 80% of the shortcomings identified by Moneyval had been resolved before the FATF meeting in Singapore.
2. Off the list in January 2026 thanks to the FATF action plan
The Prince’s Government is committed to being taken off the grey list by January 2026, following a timetable with two intermediate milestones in May and September 2025 as agreed in Singapore. “We will do everything we can over the next 18 months to than end,” said the Minister.
Monaco had already passed nine new laws in recent months, including five in November alone. However, this was not enough to avoid being placed on the grey list, and the Principality has undertaken to implement the FATF’s recommended action plan to improve its legislative framework. On this point, Pierre-André Chiappori explained: “What the press release says is that our methodology for assessing the risks of money laundering and tax fraud is inadequate. There are still technical aspects that need to be changed.”
3. No immediate budget impact
The biggest fear for local stakeholders is the budgetary impact. Chiappori is keen to reassure and sees no immediate consequences. “Monaco is a country that does not borrow. While there might be an impact in the medium term (…) concerns would arise only if we were to stay on the grey list for five years. But over a shorter duration, such as a year and a half, being on the grey list has virtually no impact,” he explained.
“Increased monitoring is not a totally unique phenomenon,” the Minister said, citing the example of other neighbouring countries and in the European Union such as Croatia and Bulgaria, which are also on the grey list.
Despite the challenge, the Monegasque authorities are convinced that the Principality will be able to come out of the situation stronger than ever. As Minister of State Pierre Dartout put it, “the fundamentals of the economy are sound” and Monaco “has a solid economic model and remains a very attractive territory.”