Beneficial ownership: a compliance priority for Monaco businesses

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Declaring beneficial ownership is not merely an administrative formality. Monaco businesses must ensure that the information they provide is accurate, complete and regularly updated. Any failure to do so may have significant legal and administrative consequences.

Significant penalties for inaccurate declarations

Where an inaccurate or incomplete declaration is made in bad faith, the penalties may include:

imprisonment for up to six months;
• a fine of up to €90,000.

Even where bad faith has not been established, a failure to comply with the relevant reporting obligations may result in administrative measures.

Monaco’s Business Development Agency may issue a formal notice requiring the company concerned to rectify the situation. The irregularity may also be referred to on the relevant register extract, while certain companies may face administrative fines of up to €20,000.

If the failure persists, the matter may be referred to the Court of First Instance.

The obligation to report discrepancies

Professionals subject to obligations relating to anti-money laundering, counter-terrorist financing, counter-proliferation financing and anti-corruption – AML/CFT-P-C – must also report any discrepancy between the information recorded on the beneficial ownership register and the information available to them through their own due diligence procedures.

Failure to report a discrepancy may expose those concerned to:

imprisonment for up to six months;
• a fine of up to €180,000, which may be increased depending on the status of the person concerned;
• additional penalties which, in the most serious cases, may extend to the dissolution of the legal entity.

Compliance as a core component of corporate governance

Reliable beneficial ownership information and an effective compliance framework are not simply regulatory requirements. They are also essential components of responsible corporate governance, effective risk management and transparency within legal structures.

Businesses and regulated professionals must therefore be able to demonstrate the relevance of their procedures, the effectiveness of their controls and the regular updating of the information they hold.

How Gordon S. Blair can assist

Gordon S. Blair assists businesses and regulated professionals with:

implementing and updating their AML/CFT-P-C frameworks;
• conducting compliance audits;
• carrying out mandatory periodic reviews;
• identifying and addressing potential compliance weaknesses;
• strengthening internal control and governance procedures.

Should you have any questions regarding your obligations or wish to assess your compliance framework, our teams remain at your disposal.

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