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Following criticism from France and the international community in 2000 for not tightening its anti-laundering laws, the Principality of Monaco responded in 2001 by implementing a series of financial reform measures that included doubling the staff of its financial transactions monitoring unit, Siccfin, and signing cooperation agreements with several European countries to fight moneylaundering.
For 52 years, Prince Rainier III has been responsible for Monaco's impressive economic growth. Under his direction, the economy has ended its exclusive dependence on gambling revenue. Its main sources of revenue are tourism, financial services, and banking.
The Principality of Monaco is an independent and sovereign state and has been a full member of the United Nations since 1993. It is closely associated with neighboring France, whose currency, the franc, is the legal tender in Monaco. In 1997, the royal Grimaldi family celebrated its 700th anniversary of rule over the principality. During the seven centuries of Grimaldi rule, Monaco has been intermittently controlled by various European powers.
It achieved independence from France in 1861. Under a treaty ratified in 1919, France pledged to protect the territorial integrity, sovereignty, and independence of the principality in return for a guarantee that Monegasque policy would conform to French interests. France has promised that in return for reforming its banking practices and tightening the laws on anti-moneylaundering, Monaco will be able to renegotiate the 1919 treaty with France.
Of 32,000 residents, Monaco is home to only 5,000 Monegasques. Only the Monegasques may participate in the election of the 18-member national council (legislature). The constitution also provides Monegasques with free education, financial assistance in case of unemployment or illness, and the right to hold elective office.
As head of state, Prince Rainier holds executive authority, formally appoints the four-member cabinet, and proposes all legislation. Legislation proposed by the prince is drafted by the cabinet and voted upon by the national council. The prince holds veto power over the council. The prince also names the prime minister from a list of names proposed by the French government. In the elections that took place in February 1998, one party, the National and Democratic Union, won all the seats in the legislature.
Citizens of Monaco may change the national council and their municipal councils democratically. The council members are elected for five years by direct universal suffrage and a system of proportional representation. Under the 1962 constitution, the prince delegates judicial authority to the courts and tribunals, which adjudicate independently in his name. The judiciary includes a Supreme Tribunal, consisting of seven members appointed by the prince based on nominations by the national council; courts of cassation, appeal, and first instance; and a justice of the peace.
Freedom of expression is guaranteed by the constitution; however, denunciations of the Grimaldi family are prohibited by an official Monegasque penal code. Two monthly magazines and a weekly government journal are published in the principality, and French daily newspapers are widely available. Radio and television are government operated and sell time to commercial sponsors, and all French broadcasts are freely transmitted to the principality. France maintains a financial interest in Radio Monte Carlo, which broadcasts in several languages.
Roman Catholicism is the state religion in Monaco, but adherents of other faiths may practice freely. The government does not, however, permit religious groups that are considered "sects" to operate.
Workers are free to form unions, but fewer than ten percent of workers are unionized, and relatively few of these reside in the principality. Trade unions are independent of both the government and the Monegasque political parties. Anti-union discrimination is prohibited. Union members can be fired only with the agreement of a commission that includes two members from the employers' association and two from the labor movement.
The rights of women are respected, and women are fairly well represented in all professions. Of the 18 members of the national council, 4 are women. The law governing transmission of citizenship provides for equality of treatment between men and women who are Monegasque by birth. Only men, however, may transmit Monegasque citizenship acquired by naturalization to their children; women are denied this right.