Fighting tax evasion and fraud Agreement signed between Principality of Monaco and European Union

In the Presence of   H.E. Mr. Serge Telle, Minister of State, M. Jean Castellini, Minister of Finance and Economy, on behalf of the Principality of Monaco, and Mr Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs have today signed, in Monaco, a Protocol amending the “Agreement between the European Community and the Principality of Monaco providing for measures equivalent to those laid down in Council Directive 2003/48/EC”. The Protocol brings the Agreement into line with global standards, as has already been done with EU legislation.

For the Principality of Monaco, signature of this Protocol is part of an ongoing process of transparency and the latest example of the country’s policy on fighting international tax evasion and fraud; part of a commitment to conclude agreements complying with the international standards developed by both the European Union and by the OECD Global Forum on exchanging information.

This step formalises the almost two-and-a-half-year negotiation process, which has been conducted in a constructive spirit between representatives of the European Union and a Monegasque delegation, in parallel with similar discussions with the Swiss Confederation, the Principality of Liechtenstein, the Principality of Andorra and the Republic of San Marino. The negotiations took account of Monaco’s unique features, while ensuring equal treatment compared with the agreements concluded with other third-party states.

Mr Moscovici noted that “signature of this Protocol marks an important new step in our common efforts to substantially improve fiscal transparency. It opens up a new chapter, where we will see a strengthening of cooperation and trust between the European Union and Monaco.”

In the future, the signature and entry into force, following ratification, of the Protocol, will result in a new stage: from 2018 (and in all subsequent years, in the nine months following the end of the relevant calendar year), Monaco will annually and automatically exchange with each of the EU member states, where their respective residents are concerned, information regarding each reportable account in Monaco, and in the case of Monaco, each reportable account in a member state.

Monaco and the member states will also be able to exchange, on request, information which is highly likely to be relevant in the application of the Agreement’s provisions, according to the same procedure that is already applied on the basis of existing bilateral agreements that follow the OECD model.

Monaco will introduce dedicated human and information resources and will adopt the necessary legislation to move ahead with automatic exchange in 2018, as it has committed to do with both the EU and the OECD. Monaco considers that this change will require considerable investment in a short timeframe, and will be possible with assistance from a company which will be appointed following a tender process currently under review.

During the signing ceremony, Mr Jean Castellini emphasised a fundamental issue for Monaco which was highlighted during these negotiations: “Monaco still appears on national blacklists issued by certain member states; lists which are based on non-cooperation or a lack of transparency,” he noted. “It would be appropriate if this progress in the fight against fraud and evasion was accompanied by Monaco’s removal from these lists.”