The Genoese built a fortress on the site of present-day Monaco in 1215. The current ruling Grimaldi family secured control in the late 13th century, and a principality was established in 1338. Economic development was spurred in the late 19th century with a railroad linkup to France and the opening of a casino. Since then, the principality's mild climate, splendid scenery, and gambling facilities have made Monaco world famous as a tourist and recreation center.
Today, Prince Albert II exercises his sovereign authority over Monaco in accordance with the Constitution and laws of 1962. He represents the Principality in all foreign relations.
Monaco is not a member of the European Union but is very closely linked to it via a customs union with France, and as such its currency is the same as that of France: the euro. Before 2002, Monaco minted its own franc coins, the Monegasque franc. Monaco has acquired the right to mint euro coins with their own insignias on their national side.
Monaco levies no income tax on individuals. The absence of a personal income tax in the principality has attracted to it a considerable number of wealthy "tax refugee" residents from European countries who derive the majority of their income from activity outside Monaco; celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.
Currently around seventy banks operate in Monaco providing 300,000 bank accounts. Banks of Monaco provide bank account mostly to Monaco non-residents: around 85% of customers are non-residents and only 15% residents (50,000 local customers versus 250,000 foreigners). Total turnover of banking sector is above $1.5 billion. Despite the fact that large part of Monaco banking customers are physical persons, number of corporate clients also rises steadily.
In 2000, a report by French parliamentarians Arnaud Montebourg and Vincent Peillon alleged that Monaco has lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco puts political pressure on the judiciary so that alleged crimes are not properly investigated.
The Organisation for Economic Co-operation and Development (OECD) issued in 1998 a first report on the consequences of the tax havens financial systems. Monaco did not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounced it in its last report (as well as Andorra, the Principality of Liechtenstein, Liberia and the Republic of the Marshall Islands) underlining its lack of co-operation as regards financial information disclosure and availability.
In 2000, the Financial Action Task Force (FATF) underlined that Monaco suffers a great lack of adequate resources. The Principality is no longer blamed in the FATF 2005 report, as well as all other territories in 2006.
Since 2003, the International Monetary Fund (IMF) has identified Monaco, along with 36 other territories, as a tax haven.
