Photo credits: Unsplash.
Monaco is engaged in effort to strengthen its financial integrity. Since June 2024, it has been listed on the Financial Action Task Force (FATF) Grey List for deficiencies in combating money laundering and terrorist financing. A favorable review in June 2025 and a comprehensive national strategy for 2025–2027 underscore Monaco’s commitment to exiting the list by mid-2026. This undertaking, while technical, is pivotal for preserving the principality’s global financial reputation and its status as a premier destination for the world’s elite.
The FATF, a Paris-based intergovernmental body that sets global standards for financial security, placed Monaco on its Grey List after identifying gaps in its anti-money laundering and counter-terrorism financing (AML/CFT) framework. By December 2024, Monaco had complied with 39 of the FATF’s 40 recommendations but faced challenges in demonstrating effective enforcement, particularly in prosecuting money laundering cases and seizing criminal assets abroad. The Grey List designation, while not as severe as a blacklist, is a reputational setback for a nation of 39,000 residents with one of the world’s highest GDPs per capita. For Monaco, where stability is a cornerstone of its appeal, this status demands urgent action.
In response, Monaco has acted decisively. In April 2025, Minister of Finance and Economy Pierre-André Chiappori introduced a National Strategy and Action Plan for 2025–2027, targeting five critical areas: improving risk assessments for money laundering and tax fraud committed abroad, increasing requests to seize foreign criminal assets, strengthening sanctions for AML/CFT violations, enhancing the Financial Intelligence Unit (FIU) with improved resources and suspicious transaction reporting, and streamlining judicial processes with additional prosecutors and stricter penalties. These measures build on 2024 reforms, including nine new laws and the creation of a unified FIU and AML/CFT supervisory authority.
The FATF-MONEYVAL plenary session in Strasbourg in June 2025 marked a significant milestone. The bodies acknowledged that Monaco had “largely addressed” the required actions within designated timelines, a rare commendation for a Grey List jurisdiction. Chiappori described the review as “unusually favorable,” noting that 80% of the deficiencies identified by MONEYVAL were resolved before the FATF’s Singapore meeting in June 2024. This progress reflects unprecedented coordination among Monaco’s government, National Council, and private sector, demonstrating a unity that contrasts with the principality’s reputation for glamour over governance.
Significant hurdles persist. The FATF requires sustained enforcement, particularly in asset seizures and sanctions. Monaco’s small size, with only 9,720 Monegasque citizens per a 2023 census, limits its pool of qualified personnel for the FIU and judiciary. While reliance on foreign expertise has been practical, it has occasionally clashed with FATF expectations for local capacity. Furthermore, Monaco’s inclusion on the European Commission’s list of high-risk third countries for AML/CFT, a consequence of its Grey List status, adds pressure pending approval by the European Parliament or Council.
The implications of this effort extend beyond regulatory compliance. Monaco’s appeal as a financial hub rests on its tax-friendly policies—lacking income or wealth taxes—and its reputation for discretion. Although the Grey List has not yet impacted the principality’s thriving real estate market, prolonged scrutiny could undermine investor confidence. Corporate service providers and family offices are already tightening know-your-client protocols and rejecting non-transparent clients, a shift that may alter Monaco’s attractiveness to its wealthiest residents.
This challenge marks a defining moment for Monaco’s role in the global financial system. The principality has navigated similar scrutiny before, notably during its brief 2009 OECD blacklist listing, which spurred significant transparency reforms. Prince Albert II’s government has expressed gratitude for the constructive engagement with FATF and MONEYVAL, signaling a commitment to international standards. With key milestones in May and September 2025, Monaco aims to join the 86 jurisdictions that have successfully exited the Grey List.
Monaco’s determination reflects its capacity for adaptation. This effort is not merely a reaction to external pressure but an opportunity to modernize its financial infrastructure. Success will reinforce Monaco’s position as a trusted hub for wealth and innovation. Failure, though unlikely given the progress, would risk eroding the principality’s standing in a world that increasingly demands transparency alongside prosperity.