Warning: Law No. 1162 has been amended by Law No. 1253 dated July 12, 2002. 

Translation of Monaco Law No. 1162
on the Fight against Money Laundering

The following is an unofficial translation of Monégasque Law No. 1162 as it appeared in Volume No.7,085 of the JOURNAL DE MONACO, the Official Bulletin of the Principality, that was published on Friday, July 9, 1993. This translation is provided for information only and should not be relied on as there are no official translations of Monégasque Laws. The only reliable source of information about Monégasque Laws is the official French language text of the laws themselves as published in the JOURNAL DE MONACO.

Law No. 1,162 of July 7, 1993, on the Participation of Financial Institutions in the Fight against Money Laundering was adopted by the Conseil National at its session on June 30, 1993, and was signed by the Prince on July 7, 1993.

SECTION I, Institutions and Persons Affected

Article 1. The following persons and entities are governed by this Law and included in the term "Financial Institutions":

1. Persons who customarily engage in banking transactions or serve as intermediaries in banking transactions;
2. The financial services of the Post Office
3. Insurance companies regulated by Article 3 of Ordinance No. 4,178 of December 12, 1968, regarding State control of insurance and capitalization companies, and regulating the insurance industry;
4. Stock brokerage companies;
5. Portfolio management companies;
6. Foreign exchange dealers.

Article 2. Persons and entities not otherwise described in Article 1 who, by reason of their professional activities, implement, control, or advise on transactions involving capital movements are also governed by this Law, except lawyers who have acquired information regarding such transactions by reason of their role as defense counsel.

SECTION II, The Duty of Financial Institutions to make Declarations

Article 3. Financial Institutions must declare to the Minister of State all accounting entries and any transactions involving money they suspect comes from illicit drug dealing or activities of organized crime.

A sovereign ordinance will create a department that will receive declarations on the Minister of State's behalf.

At the department's request, Financial Institutions will supply the names of managers or employees who are authorized to make declarations and to supply the information described in Article 10.

Article 4. Declarations must be in writing. The department created in Article 3 will acknowledge receipt.

The acknowledgement of receipt may be accompanied by a order staying for up to 12 hours the completion the transaction; any extension of this period requires an order showing cause from the President of the Court of First Instance ("Tribunal de Première Instance") or from a judge designated by its President.

For safety's sake, and at the Public Prosecutor's request, moneys, accounts, securities, or objects mentioned in the declaration may be attached by an order showing cause from the President of the Court of First Instance or a judge designated by the President. Standard rules of civil procedure apply to lifting the attachment.

The order becomes executory on issuance of a signed copy ("sur minute") after registration, or even before in exceptional circumstances, if there is urgency.

The Financial Institution will be custodian of the property in its custody.

Article 5. Financial Institutions that refuse a transaction they suspect concerns money from illicit drug dealing or activities of organized crime must also make a declaration of the refusal.

Article 6. Any information received after the initial declaration that may materially change it must also be promptly communicated to the department created in Article 3.

Article 7. Managers or designated employees who have, in good faith, declared moneys or transactions described in Article 3 may not be prosecuted under Article 308 of the Criminal Code.

Nor may any civil action be started or any professional penalty assessed against a Financial Institution, its managers, or its authorized employees who have made declarations in good faith.

These provisions shall apply even when the punishable nature of the facts that caused the declaration is not proved or when the facts have been adjudicated non-actionable, subject to reduction of sentence ("relaxe") or acquittal.

Article 8. Managers or employees of Financial Institutions who have:

• knowingly informed the owner of the moneys or the initiator of a transaction listed in Article 3 of the existence of the declaration, or,
• knowingly disclosed information on the effects given to the declaration,

are punishable by the fine provided in Article 26, no. 2, of the Criminal Code up to a multiple of 3. These penalties apply without prejudice to the penalties set out in Law No. 890 of July 1, 1970, on Illicit Drugs.

Article 9. Managers or employees of Financial Institutions may not be prosecuted for the offenses in Law No. 890 of July 1, 1970, on Illicit Drugs and Article 339 of the Criminal Code, absent a fraudulent conspiracy with the owner of the money or the initiator of the transaction, provided there was no stay ordered under Article 4.

SECTION III, Other duties of Financial Institutions

Article 10. Financial Institutions must check the identity of their clients on the basis of an official identity document before opening a bank account, or in the absence of such a document, any other reliable document that will be defined by regulation [sovereign ordinance] .

Financial Institutions must, under the same conditions, ascertain the identity of occasional clients who request transactions of a type and amount that will be defined by regulation [sovereign ordinance].

Financial Institutions must determine the identity of the true account holder, safety-deposit box owner, or the real principal of a transaction when it seems a person requesting such services may be acting on behalf of someone else.

Nevertheless, Financial Institutions are not obligated to ascertain the identity of Financial Institutions governed by the present Law.

Article 11. The provisions of paragraph 2 of Article 10 apply to bearer securities regulated by Ordinance no. 3,086 of September 25, 1945, concerning the deposit of bearer securities.

Financial Institutions must keep the transaction slips mentioned in article 5 of the above mentioned ordinance for five years and make them available on request to the department created in article 3.

Financial Institutions are subject to the same duties for Treasury Bonds defined in article 3 of Ordinance no. 1,105 of March 25, 1955, concerning the issuance of Treasury Bonds, and for cash vouchers defined by Law no. 712 of December 18, 1961, regulating the issuance of cash vouchers by commercial or industrial companies.

Information regarding the identity and type of subscriber must be kept on a register for five years.

Article 12. Information and documents regarding purchases and sales of gold, silver or platinum, such as the type, number, weight and title of materials and works in gold, silver or platinum, as well as the names and addresses of the transferor and the persons on whose behalf they were purchased by the Financial Institutions, must be kept in a register for 5 years.

Article 13. Financial Institutions must specially examine all transactions whose amounts individually or globally exceed a level set by sovereign ordinance when any such transactions have a complex or unusual character and do not appear to have an economic rationale.

Financial Institutions must in particular collect all possible information:

• Firstly, on the origin and destination of these amounts;
• Secondly, on the purpose of the operation and the person benefiting from it.

The results of this examination and all documents regarding the transaction must be kept in writing by the Financial Institutions under the conditions set out in Article 14.

Article 14. Financial Institutions must keep:

1. Identity documents on their full-time or occasional clients for five years, from the close of their accounts or the termination of their relations;
2. Records regarding any transaction by any client for five years.

Article 15. Any Financial Institution whose registered head office is located in the Principality which has a branch office or subsidiary abroad must ensure the latter comply with Article 13.

The department created by Article 3 must be informed if the laws of a foreign country block compliance.

Article 16. Financial Institutions must be vigilant, install internal control procedures and provide all appropriate training to the personnel concerned.

Article 17. To ensure compliance with the present Law, the agents of the department created in Article 3 may request communication of all documents regarding the identity of clients or transactions by them when any such request is connected with a transaction that was declared under Article 3 or specially examined under Article 13.

Article 18. The Minister of State may impose one of the following penalties if a Financial Institution breaches the duties in Sections II and III:

1. A warning;
2. A blame;
3. Prohibition from engaging in certain transactions;
4. Withdrawal of authorization.

The accused must be informed in writing of the charges and heard or duly provided with an opportunity to explain himself before any decision is taken. Explanations are kept in a report signed by the person concerned.

SECTION IV, The Duty to Make a Declaration for Persons Described in Article 2

Article 19. Persons described in Article 2 must declare to the Minister of State any transactions of which they have knowledge concerning money which they suspect comes from the illicit drugs trade or the activities of criminal organizations.

Declarations are received on behalf of the Minister of State by the department created in Article 3.

Persons exercising the profession of auxiliary of justice or notaire make their declarations to the Prosecutor-General.

Declarations are in writing with acknowledgement of receipt.

Information acquired after the declaration and susceptible of materially modifying it must be communicated at once.

The persons mentioned above benefit from Article 7 and may not be prosecuted for the offenses set out in Law number 890 of July 1, 1970, on Drugs and Article 339 of the Criminal Code, provided they acted in good faith when making the declaration and there was no fraudulent conspiracy with the owner of the moneys or the author of the offense. They must comply with the duties in Article 8, subject to the penalties set out in that Article.

SECTION V, Foreign Exchange Dealers

Article 20. Persons who customarily engage in foreign exchange transactions as a business are subject to this section, with the exception of credit institutions, stock brokerage companies and portfolio management companies. They must record all transactions in excess of an amount determined by sovereign ordinance in a ledger which is kept for five years.

Article 21. The Minister of State may apply any one of the following penalties in the event of non-compliance with this Law by the persons described in Article 20:

1. A warning;
2. A blame;
3. Prohibition from engaging in the profession of foreign exchange dealer.

The accused must be informed in writing of the charges and heard or duly provided with an opportunity to explain himself before any decision is taken. Explanations are kept in a report signed by the person concerned.

Article 22. Persons convicted of the following offenses are prohibited from being foreign exchange dealers:

1. A crime;
2. Any offense in Articles 91, 94, 95, 118, 119, 330, 331, 335, and 361 of the Criminal Code;
3. Theft or criminal fraud ("escroquerie" or "abus de confiance");
4. Any offense in paragraph VI of section II of Chapter II of Title II of the Criminal Code regarding the laws and regulations on gaming, lotteries, loans against security or usurious loans;
5. Appropriation, extortion of funds or securities, bankruptcy, action against the credit of the State, or breach of the laws on exchange control when the persons who have committed these offenses are public depositaries;
6. Any breach of the laws and regulations governing commercial companies;
7. Receipt of objects procured through one of these offenses;
8. Any offense set out in Law no. 890 of July 1, 1970, on illicit Drugs.

Article 23. Any person who has been adjudicated a personal bankrupt or subjected to a prohibition set out in Article 576 of the Commercial Code, or removed from a position of ministerial officer by judicial decision, is prohibited from engaging in foreign exchange activities as a professional.

Article 24. Any person who fails to comply with Articles 22 and 23 may also be imprisoned for a period of 6 months to 3 years, without prejudice to the penalties of Article 33.

SECTION VI, Miscellaneous

Article 25. Casinos regulated by Law no. 1,103 of June 12, 1987, on Gaming must report all transactions to the Minister of State of which they have knowledge, irrespective of means of payment, chips or plates ("plaques"), concerning funds which they suspect come from the illicit drugs trade or the activities of criminal organizations.

The casinos mentioned above will supply the names of the managers or employees authorized to make the above declaration to the department created in Article 3.

The above-mentioned casinos are governed by paragraphs 2, 4, 5, and 6 of Article 19.

Article 26. The specially commissioned agents of the department created in Article 3 will monitor the enforcement of the Law.

These agents will have the same powers as those conferred on the commissioned and sworn agents of the Economic and Financial Investigation Service under Articles 18 and 19 of Law no. 1,144 of July 26, 1991, regulating the conduct of certain economic and legal activities.

Article 27. The agents of the service created in Article 3 will report in writing to the Minister of State whenever they note facts which may be part of the illicit drugs trade or the activities of criminal organizations.

Article 28. The information collected by agents, duly appointed and sworn for this purpose, may only be used for the purposes set out in this Law, subject to the penalties set out in Article 308 of the Criminal Code.

Nevertheless, the above-mentioned department may give information to the Prosecutor-General when any such information regards facts that are connected with the illicit drugs trade or the activities of criminal organizations which may lead to criminal prosecution. The department may also receive relevant information from the Prosecutor's office.

Article 29. Whoever attempts to hinder an investigation conducted under Article 26 will be punished by imprisonment from one to six months and the fine set out in no. 2 of Article 26 of the Criminal Code or one of these two penalties.

Article 30. The department created in Article 3 will have the same powers to investigate persons described in Article 2, except auxiliaries of justice or notaries.

Article 31. The Minister of State may give information to competent foreign authorities on transactions that appear connected to the illicit drugs trade or the activities of criminal organizations, subject to reciprocity, provided that criminal action based on the same facts has not been started in the Principality.

Information will not be supplied when the authorities in question are not subject to the same obligations of professional secrecy as the agents of the department in Article 3.

Article 32. Any person who violates Articles 3, 5, 19, and 25 will be punished by the fine in Article 26 no. 3 of the Penal Code.

Article 33. Any person who violates Articles 6, 11, 12, 14, and 20 will be punished by the fine in Article 26 no. 2 of the Criminal Code.