Automatic Exchange of Information (Financial Accounts) • Amending Protocol of 13 October 2025 to the Agreement between Monaco and the European Union (Sovereign Order No. 11.682 of 4 December 2025)

Sovereign Order No. 11.682 of 4 December 2025 (JDM No. 8778 of 19 December 2025) gives effect to the Amending Protocol of 13 October 2025 to the Agreement between the European Union and the Principality of Monaco on the exchange of financial account information to improve international tax compliance, in accordance with the consolidated text (August 2022) of the standard for the automatic exchange of financial account information established by the Organisation for Economic Co-operation and Development (OECD) (OECD Common Reporting Standard "CRS").

The Protocol entered into force on 1 January 2026. It amends:

• the provisions of the Agreement of 7 February 2004;
• Annex I - Common Standard for Reporting and Due Diligence on Financial Account Information [NCD];
• Annex III - Additional Data Protection Safeguards for the Processing of Data Collected and Exchanged under this Agreement.

The Amending Protocol provides the legal and operational basis for the automatic exchange of financial account information (implementation of the OECD CRS) in relations between Monaco and the Member States of the European Union: the types of information to be exchanged, the timetable and procedures for exchanges, the procedures for cooperation in matters of compliance and enforcement of the Agreement, the rules on confidentiality and data protection (with additional safeguards, as Monaco's legislation does not currently benefit from a decision by the European Commission recognising that the Principality of Monaco is a country ensuring an adequate level of protection of personal data).

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WHAT IS CHANGING (from 1 January 2026):

For the record, the Protocol of 12 July 2016 amending the Agreement of 7 February 2004 between the European Community and the Principality of Monaco providing for measures equivalent to those laid down in Council Directive 2003/48/EC (Sovereign Order No. 6. 207 of 16 December 2016) strengthened mutual assistance in tax matters relating to financial accounts between the contracting parties, aligning the 2004 Agreement with the OECD's CRS transposed into European Union law by Directive 2011/16/EU on administrative cooperation in the field of taxation.

The Amending Protocol of 13 October 2025 transposes the amendments to the OECD CRS, incorporated at international level on 26 August 2022 (see consolidated text) and incorporated into European Union law by Council Directive (EU) 2023/2226 of 17 October 2023 amending Directive 2011/16/EU on administrative cooperation in the field of taxation:

• extension of the scope of the CRS to include new digital financial products, such as specific electronic money products and central bank digital currencies (CBDCs);
• introduction of more detailed reporting requirements and enhanced due diligence procedures;

In addition, the Protocol updates references to the contracting parties' data protection legislation and applicable safeguards (for Member States, Regulation (EU) 2016/679 "GDPR" lays down specific rules on data protection in the European Union, which also apply to exchanges of information carried out by Member States covered by the agreement); for Monaco, Law No. 1.565 of 3 December 2024 on the protection of personal data, and conditions of application laid down by Sovereign Order No. 11.327 of 10 July 2025).

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NOTE:

The OECD's comprehensive review highlighted the growing complexity of financial instruments and the emergence and use of new types of digital assets. The CRS has therefore been adapted (consolidated version or "CRS 2.0") to ensure full and effective compliance with tax obligations.

The update to the CRS broadened the scope of reporting to include new digital financial products, such as specific electronic money products and central bank digital currencies, which offer credible alternatives to traditional financial accounts, which are already reportable under the CRS.

In parallel with the update to the CRS, a new OECD Crypto-asset Reporting Framework (CARF) has been introduced. It is used as a complementary mechanism, specifically designed to address the rapid development and growth of the crypto-asset market.

To ensure effective interaction between these two frameworks and to limit double reporting:

• Specific electronic money products and central bank digital currencies (CBDCs) are excluded from the scope of the CDC, given that they are covered by the updated CRS.
• Crypto-assets falling within the scope of the updated CRS are considered Financial Assets for the purposes of reporting Custodial Accounts, Equity or Debt Securities in Investment Entities (except in the case of services consisting of Exchange Transactions for or on behalf of clients, which are covered by the CARF), indirect investments in Crypto-assets through other traditional financial products or traditional financial products issued in the form of Crypto-assets;
• an optional provision allows reporting financial institutions to waive the reporting of gross proceeds from assets classified as crypto-assets in both frameworks, where this information is reported under the CRS, while continuing to report all other information under the CRS, such as account balances,

The CARF is implemented within the European Union by Directive (EU) 2023/2226 amending Directive 2011/16/EU from 1 January 2026.

However, at this stage, the Principality of Monaco has not been identified as a relevant jurisdiction for the implementation of the CARF by the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes. Nevertheless, the Principality has undertaken to take all necessary measures to implement and apply the CARF on an accelerated basis once the Global Forum designates it as such a jurisdiction. Thus, the Amending Protocol of 13 October 2025 delimits the scope of application of the agreement, the CARF (for the Principality of Monaco) and Directive (EU) 2023/2226, in order to limit cases of double reporting when the Principality of Monaco applies the CARF to all Member States of the European Union.

The more detailed reporting requirements and enhanced due diligence procedures introduced are intended to improve the reliability and use of the information exchanged.

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