Monaco's Grey Listing: What It Means for Trustees and Family Offices

In early 2025, Monaco was placed on the FATF grey list — a formal designation signalling that the principality's anti-money laundering and counter-terrorism financing frameworks require strengthening. For trustees, family offices, and corporate structures with Monaco connections, the practical consequences are immediate and material.

What Grey Listing Means in Practice

Grey listing does not mean Monaco is a prohibited jurisdiction. It means that international correspondent banks and regulators now apply enhanced due diligence to transactions and structures with Monaco exposure. For clients, this translates into longer processing times for wire transfers, additional documentation requirements, and in some cases the withdrawal of banking relationships by foreign institutions unwilling to carry the associated compliance burden.

The impact falls hardest on structures that rely on Monaco-based trustees or family offices as account signatories, or that hold assets through Monaco-domiciled entities. Banks that previously accepted these structures without question are now re-examining their risk appetite.

The Custody and Banking Solution

iKYC recently assisted a complex family trust structure involving multiple SPVs and beneficiaries across international borders whose banking arrangements had been disrupted by the grey listing. The solution was a centralised banking and custody arrangement established through a top-rated corporate bank in the Channel Islands.

The structure allowed the Monaco-based trustee to separate the banking and custody function from the Monaco jurisdiction entirely, placing assets in a well-regulated offshore financial centre with no FATF concerns. The arrangement provided:

• Operational banking for the trust and its SPVs under a single institutional relationship
• Custody of securities and alternative assets with a Tier 1 custodian
• The ability to appoint an external investment manager without moving the custody relationship
• Lending against assets held in custody, providing liquidity without forced asset sales
• T+1 liquidity on cash positions with multi-currency capability across GBP, USD, and EUR

The key insight was that the problem was jurisdictional, not structural. The trust itself was well-administered and compliant. Moving the banking and custody function to Jersey removed the grey listing friction entirely while preserving the trustee's operational control.

What Trustees and Advisers Should Do Now

If you administer or advise structures with Monaco exposure, the time to act is before a banking relationship is withdrawn rather than after. Banks give limited notice when they exit relationships, and finding a replacement under time pressure is significantly harder than planning a transition in advance.

iKYC can assess whether existing banking arrangements remain viable and identify suitable institutional alternatives where they do not. The assessment is complimentary and takes one business day.