A strengthening of Monegasque Banking Law

Établissements Boisbouvier Robert welcomes the adoption of Law no. 263 by Monaco’s National Council on 17 October 2024, which amends and strengthens the legal framework relating to the right to a bank account in the Principality. This legislation, which enhances Law no. 1.492 of 8 July 2020, consolidates the rights of access to banking services for both individuals and companies, by providing extended protection against implicit refusal of bank accounts and unilateral cancellations.

1. Implicit refusal to open an account: towards legal notification

Act 263 introduces a presumption of implicit refusal in the event of prolonged silence on the part of the bank. If an application to open an account remains unanswered after 15 working days, this silence is now deemed to constitute a refusal, opening the way for an administrative appeal. The applicant may then refer the matter to the Budget and Treasury Department for the designation of a banking establishment. The aim of this provision is to improve the transparency of refusals and to guarantee applicants the possibility of obtaining a bank account, thereby limiting the restrictive practices of financial institutions.

2. Extension of the right to an account: broader legal protection

The scope of the right to an account has been extended. Whereas it initially applied only to applications to open an account, the new law now includes collective accounts and unilateral cancellations. This extension offers twofold protection: not only do individuals benefit from an increased right to an account, but businesses, which often rely on specific accounts for their collective transactions, are also better protected. In this way, the law provides professionals with a safety net in a banking environment that is increasingly constrained by compliance obligations.

3. Accelerated redress : More responsive justice

Given the economic stakes of a bank refusal, Act 263 introduces a summary procedure before the president of the court of first instance, enabling a rapid judicial response in the event of a dispute relating to the right to an account. This approach offers claimants smoother access to essential banking services and rapid resolution of their disputes. By reducing timeframes, the law promotes agile economic regulation adapted to the Principality’s business realities.

4. Safeguarding economic activity: provisional support measures

The new legislation provides for temporary measures to ensure the continuity of business activities in the event of banking difficulties. These measures enable companies to maintain their operations until an irrevocable court decision is made, thereby mitigating the risks of sudden and damaging interruption to their financial flows. This temporary safeguard demonstrates Monaco’s ambition to actively support its economic fabric within a framework of reinforced legal security.

Context and Purpose of the Banking Reform: Between Financial Inclusion and International Compliance

The reform introduced by Act 263 aims to strike a balance between anti-money laundering (AML/CFT) requirements and the need for greater financial inclusion in Monaco. The legislation is inspired by the recommendations of MONEYVAL and the FATF, which advocate increased vigilance on the part of financial institutions while guaranteeing access to banking services for legitimate customers. Monaco aspires to position itself as a model of compliance while ensuring banking accessibility that is compatible with the economic growth and internationalisation of its residents and businesses.

Technical details of Act 263: towards a new banking paradigm in Monaco

• Opening an account: Banking establishments now have a maximum of 15 working days to decide on an application to open an account. In the absence of a response, refusal is presumed, and the customer may refer the matter to the Monegasque authorities for the compulsory designation of an institution.
• Implicit refusal: If no response is received from a bank, the Monegasque Budget and Treasury Department may be asked to designate a bank. This mechanism limits unjustified discretions by banks, while providing an alternative to implicit refusals.
• Temporary measures: In cases of unilateral termination, temporary measures may be granted to keep the account in operation until a final court decision. This measure protects economic activity against sudden interruptions.

Conclusion: A significant step forward for banking inclusion and the protection of economic rights in the Principality

Law 263 marks a significant step forward in the modernisation of Monegasque banking law, promoting a more inclusive and responsive environment to the needs of individuals and businesses. This legislation aims not only to comply with international standards in the fight against money laundering, but also to ensure that banking services are open to all residents and economic players in Monaco.

For further information on this banking reform and its practical implications, contact Établissements Boisbouvier Robert, legal advisers in the Principality of Monaco.