(Moneyval) The new provisions of Sovereign Order 2.318 since 30 September 2023 (Sovereign Order 10.124 of 21 September 2023)

MONEYVAL ● Fight against money laundering, the financing of terrorism and proliferation ● Law No. 1.362 ● Regulations

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Sovereign Order 10.124 of 21 September 2023 (JDM 8.662 of 29 September 2023) amends Sovereign Order 2.318 of 3 August 2009 setting the conditions for application of Law 1.362 of 3 August 2009 on the fight against money laundering, financing of terrorism and the proliferation of weapons of mass destruction, and corruption, as amended by law 1.549.

Entry into force on 30 September 2023 :

• the new provisions of Law 1.362 (resulting from Law no. 1.549). Exception: articles 46-1 and 46-5 of Act 1.362 relating to the new Monegasque Financial Security Authority ("AMSF" replacing SICCFIN), which came into force on 11 August 2023 (Sovereign Order 10.076 of 31 July 2023).
• the new provisions of Sovereign Order 2.318 (resulting from this Sovereign Order 10.124). Exception: the CERC remains competent for all audits commenced before 30 September 2023. The legal and regulatory provisions applicable before 30 September 2023 remain applicable for the time necessary to process the said procedures (art. 127 L. 1.549, art. 55 SO 10.124).

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SUMMARY

— New definitions (Art. 1 OS 2.318):

• 4°) "payment service provider
• 8°) "credit transfer and transfer of funds
• 9°) "cross-border credit transfer and transfer of funds
• 10°) "national transfer and transfer of funds
• 12°) "unique identification number".
• 13°) "funds".
• New 21° a) "association or federation of associations".
• New 21° ter) "foundation
• 24°) "digital assets".

— Identification and verification of client identity:

• The use of numbered accounts or accounts with a conventional name "or under a manifestly fictitious name" is permitted in communications and transactions within the professional under certain conditions (art. 5).
• New obligation to identify customers that are associations, federations of associations or foundations. (new art. 8-1)
• Application of due diligence measures by virtual asset service providers (VASPs) when they carry out, on an occasional basis, a transaction of an amount that reaches or exceeds 1,000 euros, whether it is carried out in a single transaction or in several transactions between which there appears to be a link. (art. 64, new paragraph 13)

— Identification of beneficial owners:

• Professionals shall identify the beneficial owner of the business relationship and verify the identification details gathered on the beneficial owner by collecting any "probative" (replacing "appropriate") document or supporting evidence. (art. 13)
• Where the client is a legal entity, professionals shall identify and verify the identity of "the beneficial owners within the meaning of Article 21 of Law no. 1.362" (art. 14, paragraph 1; art. 15, paragraph 1)
• Where a trust directly or indirectly holds or controls at least 25% of the capital or voting rights of the legal person, "beneficial owner" means the persons referred to in Article 15" (art. 14, new paragraph 3).
• The beneficial owners within the meaning of article 21 of law no. 1.362 when the client is an association or federation of associations, or a foundation. (new art. 15-2)

— Internal policies and procedures - Enhanced due diligence requirements for politically exposed persons:

• Internal procedures and the customer acceptance policy shall specify the criteria and methods for determining whether customers are politically exposed persons "or become politically exposed persons". (art. 24, 3rd paragraph).

— Enhanced due diligence requirements applicable to transactions involving high-risk third countries:

• List (non-exhaustive) of countermeasures referred to in the third paragraph of Article 14-2 of Act 1.362 that are determined in consideration of risks identified by the Government or in consideration of assessments and reports drawn up by international organisations and standard-setting bodies competent in the prevention of money laundering and the fight against the financing of terrorism, with regard to risks presented by particular States. (new art. 25-2-1)

— Autorité Monégasque de Sécurité Financière (AMSF):

• Duties incompatible with membership of the AMSF Board of Directors pursuant to article 46-1 of law no. 1.362. (art. 35)
• Transmission by the Director of the AMSF to the Minister of State of the closing of the accounts of the AMSF with a view to their examination by the Controller General of Expenditure, pursuant to article 46-5 of law no. 1.362. (art. 35-1)
• Each year, the department responsible for supervising the AMSF sends or makes available, via any secure electronic channel, to each professional a questionnaire relating to his or her situation on 31 December of the calendar year, pursuant to article 56-2-1 of Act no. 1.362, or additional questionnaires - content, responses and storage available to the department, information and documents for 5 years from their date of transmission (art. 35-2).
• The AMSF may disseminate any information or recommendations it deems necessary concerning the application of the measures provided for by Act no. 1.362 and this Order. (art. 36-2)
• The Financial Intelligence Unit of the AMSF shall determine the method of transmission by notaries and State bailiffs of the declarations referred to in Chapter V and the information provided for in Article 50 of Act 1.362. (new art. 36-2-1)
• Definition pursuant to Article 53-2 of Law no. 1.362 of the conditions of good repute of the persons who are the effective directors, partners, shareholders and beneficial owners of the bodies and persons referred to in Article 1 of Law no. 1.362 - Assessment, cooperation and exchange of information to this end between the AMSF and the State authorities and departments. (art. 36-3 and 36-4)

— Control reports:

• The professional may put forward new elements of which the controller was unaware or state divergent points of view, only at the request of the department exercising the AMSF's supervisory function. (art. 37, 6th and 7th paragraphs)

— Information that must accompany electronic transfers:

• Digital asset service providers must comply with the provisions of Chapter XIII when carrying out credit transfers and transfers of digital assets. (new art. 39-1)

— Special provisions for groups:

• The broad concept of "any other form of direct or indirect control" over companies is added to the definition of a group (art. 48, new letter e).
• Deletion of the reference to the European Union. (art. 48-1, 48-6)

— Register of bank accounts and safe deposit boxes:

• Express reference to "trust, any legal entity, association or foundation". (art. 54-1)
• Insertion of procedures for declaring the opening, closing and modification of accounts and safe-deposit box rental contracts. (art. 54-2)
• Conditions of access to the register by the competent authorities, as well as the mechanisms for ensuring the traceability of consultations carried out by authorised persons (new art. 54-3).

— Repeal of Chapter XVII relating to the procedure before the CERC (the provisions of Chapter XVII remain applicable for controls commenced before 30 September 2023).

— Register of beneficial owners:

• Addition of the "date of the last change in the terms of control exercised" over the company or economic interest grouping (EIG) among the information declared when applying for registration or an application for amending registration in the register. (art. 61)
• Procedures for designating the person responsible for information on beneficial owners pursuant to paragraph II of article 22-1 of law no. 1.362 (new art. 61 bis)
• Conditions for access to the register by the competent authorities, as well as the mechanisms for ensuring traceability of consultations carried out by authorised persons (art. 61-1)
• Conditions for access to the register by the bodies and persons referred to in Articles 1 and 2 of Act 1.362 in the context of customer due diligence measures, pursuant to point 2°) of the first paragraph of Article 22-6 of Act 1.362 (Art. 62)
• Conditions of access to the register by all persons other than those referred to above, pursuant to article 22-7 of law no. 1.362. (art. 63)
• Imperative mentions of the request for restriction of access to the register referred to in article 22-8 of law no. 1.362. (art. 63-1); temporary prohibition of access to the bodies and persons referred to in articles 1 and 2 of law no. 1. 362, with the exception of the bodies and persons referred to in items 1°) to 4°) [credit institutions, finance companies, payment institutions, persons exercising financial activities, insurance undertakings] and 25°) to 28°) {virtual asset service providers - VASPs] of Article 1 of the said law (art. 63-3, paragraph 1; art. 63-3, paragraph 3).

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