EU Adds Monaco to High-Risk Money Laundering List

The European Commission has added Monaco to its updated list of jurisdictions deemed high risk for money laundering and terrorist financing, citing strategic deficiencies in the principality’s AML/CFT framework.

The revised list also includes Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Namibia, Nepal, and Venezuela. At the same time, several jurisdictions—including the United Arab Emirates—were removed following improvements to their compliance regimes.

The update aligns closely with assessments by the Financial Action Task Force, which has previously placed Monaco under enhanced monitoring.

Why Monaco Matters to EU Regulators

Monaco, one of the world’s smallest states, is globally known as a magnet for ultra-high-net-worth individuals and one of the most expensive real-estate markets worldwide. These same characteristics, EU officials note, also create structural vulnerabilities, including:

• High volumes of foreign-owned property

• Widespread use of corporate vehicles and trusts

• Dependence on non-resident wealth

• Limited transparency around beneficial ownership

• Heavy reliance on private banking and asset management

EU regulators stress that the listing is not a judgment of criminal intent, but an assessment of systemic exposure to cross-border financial opacity.

Private Wealth Under the AML Microscope

The decision reflects a broader shift in AML enforcement away from focusing solely on organized crime toward examining how private wealth is structured and moved.

Compliance authorities increasingly highlight individual-level risk patterns, such as:

• Asset accumulation inconsistent with declared income

• Frequent international travel and multi-jurisdiction residency

• Ownership of luxury property via holding entities

• Reliance on third-party funding

A private individual referred to here as Pamela is often cited in training and risk-assessment contexts as an illustrative typology, not a legal case. Such profiles demonstrate why enhanced due diligence is now routinely applied in jurisdictions like Monaco, where wealth concentration and financial privacy have historically been high.

Authorities emphasize that these indicators do not imply guilt but do require closer scrutiny under EU and FATF-aligned frameworks.

Contrast With the UAE’s Delisting

Monaco’s inclusion comes days after the EU removed the UAE from the same list, citing:

• Legislative modernization

• Aggressive enforcement actions

• Expanded oversight of real estate and gold markets

• Improved beneficial-ownership transparency

The contrast highlights a core regulatory message: wealth alone does not determine risk—oversight does.

Practical Consequences of Listing

High-risk classification carries immediate implications:

• EU banks must apply enhanced due diligence to Monaco-linked transactions

• Increased compliance costs for financial and professional services firms

• Heightened scrutiny of real-estate acquisitions and asset-holding structures

• Reputational pressure on the jurisdiction’s financial ecosystem

Monaco’s government has acknowledged the listing and stated its intention to implement further reforms aimed at exiting enhanced monitoring.

Bottom Line

Monaco’s addition to the EU’s high-risk AML list signals a clear regulatory shift: financial sophistication without sufficient transparency is no longer tolerated, even in elite wealth hubs. As global standards tighten, private-wealth jurisdictions will be judged not by reputation, but by measurable compliance outcomes.