Europaudvalget 2025
KOM (2025) 0405
Offentligt
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EUROPEAN
COMMISSION
Brussels, 17.7.2025
COM(2025) 405 final
2025/0220 (NLE)
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the Union, of the Amending Protocol to the Agreement
between the European Union and the Principality of Monaco on the exchange of
financial account information to improve international tax compliance in accordance
with the Standard for Automatic Exchange of Financial Account Information in Tax
Matters developed by the Organisation for Economic Cooperation and Development
(OECD)
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EXPLANATORY MEMORANDUM
1.
•
CONTEXT OF THE PROPOSAL
Reasons for and objectives of the proposal
The present proposal concerns the signature of the Amending Protocol to the Agreement
between the European Union and the Principality of Monaco (Monaco) on the exchange of
financial account information to improve international tax compliance in accordance with the
Standard for Automatic Exchange of Financial Account Information in Tax Matters
developed by the Organisation for Economic Cooperation and Development (OECD)
1
(the
Agreement).
The Agreement provides the legal basis for the reciprocal automatic exchange of financial
account information between the EU Member States and Monaco, in accordance with the
Common Reporting Standard (CRS) developed by the OECD. The same standard is
implemented within the European Union under Council Directive 2014/107/EU
2
(DAC 2 –
the first amendment to Directive 2011/16/EU
3
on administrative cooperation in the field of
taxation – DAC)
4
.
Important changes to the CRS were approved at international level on 26 August 2022
5
and
will apply from 1 January 2026. Council Directive (EU) 2023/2226
6
(DAC8) already
implemented these changes within the European Union and will also apply from 1 January
2026.
The changes extend the scope of the CRS to ensure the coverage of electronic money products
and central bank digital currencies. They also further improve the due diligence procedures
and reporting outcomes, with a view to increasing the usability of CRS information for tax
administrations and limiting burdens on financial institutions, where possible.
To ensure that the automatic exchange of financial account information between EU Member
States and Monaco is aligned with, and continues to take place in accordance with, the
updated CRS from 1 January 2026, it was necessary to negotiate and agree corresponding
amendments to the Agreement.
In May 2018, Regulation (EU) 2016/679 on the protection of natural persons with regard to
the processing of personal data and on the free movement of such data, and repealing
Directive 95/46/EC (General Data Protection Regulation “GDPR”)
7
started to apply.
To ensure that the Agreement reflects these updates, it was necessary to remove the references
to the repealed Directive 95/46/EC and replace these references with references to Regulation
(EU) 2016/679. Simultaneously, the references to the national data protection legislation of
Monaco were also updated. Finally, Article 6 of the Agreement as well as the additional data
protection safeguards regarding the treatment of data processed under this agreement (Annex
1
2
3
4
5
6
7
OJ L 332, 19.12.2003, p.42. OJ L225, 19.08.2016, pages 1 to 40; OJ L280, 18.10.2016, pages 1 to 2.
OJ L 359 of 16. 12. 2014, p. 1 to 29.
OJ L 64 of 11. 3.2011, p. 1 to 12.
OJ L 359, 16.12.2014, p.1-29.
https://www.oecd.org/en/publications/international-standards-for-automatic-exchange-of-information-in-tax-
matters_896d79d1-en.html,
pages 62 to 102.
Council Directive (EU) 2023/2226 of 17 October 2023 amending Directive 2011/16/EU on administrative
cooperation in the field of taxation (OJ L, 24.10.2023)
OJ L119 of 4.5. 2016, p. 1 to 88.
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III) have been slightly adjusted to fully align the wording and ensure continued compliance
with the GDPR.
A Council decision authorising the opening of negotiations for the amendment of the
Agreement concerning the automatic exchange of financial account information to improve
international tax compliance between the European Union and the Principality of Monaco was
adopted on 21 May 2024
8
.
Several rounds of negotiations were held, and a provisional agreement was reached in May
2025. Subsequently, the draft text of the Amending Protocol was initialled by the Chief
negotiators on 18 June 2025.
The Council has consistently been informed about the progress in the negotiations in the
Working Party on Tax Questions and in the High Level Working Party. In particular, the text
of the draft Amending Protocol was shared and discussed with the Member States ahead of its
initialling. The initialled text was also shared with the European Parliament.
The Commission considers that the objectives set out by the Council in its negotiating
directive have been attained and that the negotiated text is acceptable to the Union.
•
Consistency with existing policy provisions in the policy area
The amendment of the Agreement was negotiated in line with the comprehensive negotiating
directive adopted by the Council on 21 May 2024.
The negotiated Amending Protocol ensures that the existing agreement between the European
Union and Monaco remains aligned with Union legislation in the same field, notably the DAC
as amended by DAC8.
DAC8 includes, among other amendments, the latest changes to the OECD CRS. In the light
of the close relationship in this field between the European Union and Monaco, it is important
to strengthen along the same lines the administrative cooperation with their tax authorities in
the field of automatic exchange of financial account information. The timely update of the
Agreement ensures the smooth and effective continuation of this administrative cooperation
beyond 1 January 2026.
The amendments to the Agreement also take account of the Union policies in the field of the
fight against money laundering and terrorist financing, because the Customer Due Diligence
activities to be performed by Financial Institutions, in view of collecting the financial account
information to be exchanged under the Agreement, will be substantially aligned with those
that the same Financial Institutions have to apply as obliged entities under the European
Union legal framework in the fight against money laundering and terrorist financing.
The Amending Protocol also takes account of the Union policies in the field of respect of
fundamental rights, notably on protection of personal data in the case of the outflow of this
data to non-EU and non-EEA countries.
8
Council Decision (EU) 2024/1489 of 21 May 2024 authorising the opening of negotiations for the
amendment of the Agreements concerning the automatic exchange of financial account information to
improve international tax compliance between the European Union and the Swiss Confederation, the
Principality of Liechtenstein, the Principality of Andorra, the Principality of Monaco and the Republic
of San Marino, respectively
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As far as the parts concerning the CRS are concerned, the Agreement itself includes, in
Article 8, a provision requiring the Contracting Parties to consult each other on each occasion
when an important change is adopted at OECD level to any of the elements of the CRS. The
Article also provides that following these consultations, the Agreement may be amended by
means of a protocol between the Contracting Parties. As important changes to the CRS were
approved within the OECD on 26 August 2022, and in accordance with the Union’s exclusive
competence stemming from the existing Agreement, the Amending Protocol implements all
changes that are necessary to reflect the corresponding changes to the CRS. The
implementation of those changes within the Union has been provided for by means of Council
Directive (EU) 2023/2226.
2.
•
LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
Legal basis
Given that the main objective and components of the Agreement is to improve administrative
cooperation in the area of direct taxation, the substantive legal basis is Article 115 of the
Treaty on the Functioning of the European Union (TFEU).
Given that Article 115 TFEU requires unanimity for Union act, the procedural legal basis for
the conclusion of this agreement should include the second subparagraph of Article 218(8)
TFEU. Therefore, the procedural legal basis for the proposed decision to authorise the signing
of the envisaged agreement is Article 218(5) TFEU in conjunction with the second
subparagraph of Article 218(8) TFEU.
•
Union competence
Under the case law of the Court of Justice, the Union has exclusive competence where an
agreement may affect common rules or alter their scope.
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This jurisprudence has been
enshrined in Article 3(2) TFEU. Article 3(2) TFEU provides that, in addition to the areas of
exclusive Union competence listed in Article 3(1) TFEU, the Union shall “also have exclusive
competence for the conclusion of an international agreement when its conclusion is provided
for in a legislative act of the Union or is necessary to enable the Union to exercise its internal
competence, or in so far as its conclusion may affect common rules or alter their scope”.
•
Proportionality
The amending protocol respects the principle of proportionality and does not go beyond what
is necessary to meet the objective of updating the Agreement, namely, to incorporate the
changes to the Common Reporting Standard that shall take effect from 1 January 2026. These
amendments will enable the Member States to continue the automatic exchange of financial
account information with Monaco in an uninterrupted manner, and in a manner that aligns
with the new requirements of the CRS, as already incorporated in the DAC8.
•
Choice of the instrument
Article 218(5) TFEU provides that the Commission or the High Representative of the Union
for Foreign Affairs and Security Policy shall submit proposals to the Council, which shall
adopt a decision authorising the signing and, if necessary, the provisional application of an
international agreement. Given the subject matter of the envisaged agreement, it is appropriate
for the Commission to submit a proposal to that effect.
9
Opinion 3/15 of the Court, ECLI:EU:C:2017:114, paragraph 118 and the case law quoted therein
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3.
•
RESULTS OF IMPACT ASSESSMENTS
Impact assessment
According to tool 7 of the Better Regulation
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, an impact assessment is not needed, inter alia,
when the Commission has little or no choice in the matter.
This condition is satisfied in the present case as the amendments to the existing Agreements
with respect to the automatic exchange of financial account information fully align with the
changes to the CRS that were agreed at the OECD level and already incorporated into EU law
by means of the DAC8. As regards the updates on data protection, these are aimed at updating
references to the EU and Monaco data protection legislation and the specific data protection
safeguards set out in the Agreement.
•
Fundamental rights
The envisaged amending protocol to the Agreement will respect the key values of the
European Union as established in Article 2 of the Treaty on the Functioning of the European
Union and the Charter of Fundamental Rights of the European Union.
4.
BUDGETARY IMPLICATIONS
The proposal has no implication for the EU budget.
5.
•
OTHER ELEMENTS
Detailed explanation of the specific provisions of the proposal
The envisaged amendments cover the following points:
1.
Amendments to ensure that the automatic exchange of financial account information
between Member States and Monaco under the existing Agreement is aligned with and
continues to take place in accordance with the updated CRS from 1 January 2026
The foreseen amendments expand the scope of reporting to include new digital financial
products, such as Specified Electronic Money Products and Central Bank Digital Currencies.
Simultaneously and with the aim of improving the reliability and use of the exchanged
information, the amendments introduce more detailed reporting requirements and
strengthened due diligence procedures. These amending reporting and exchange of
information requirements are provided for within Article 2, Article 3 and Annex I. They will
apply from 1 January 2026.
The amendments also contain provisions to ensure an efficient interaction between the CRS
and the separate Crypto-Asset Reporting Framework (CARF) developed by the OECD
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.
These provisions allow to limit instances of duplicative reporting, while maintaining a
maximum amount of operational flexibility of Reporting Financial Institutions that are also
subject to obligations under the CARF. These provisions shall only apply as of the date when
Monaco commences to apply the CARF with all Member States.
10
https://ec.europa.eu/info/sites/default/files/br_toolbox-nov_2021_en_0.pdf
https://www.oecd.org/en/publications/international-standards-for-automatic-exchange-of-information-in-tax-
matters_896d79d1-en.html,
pages 8 to 61.
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2.
Update to the legal reference on data protection legislation and applicable data
protection safeguards
All references to Directive 95/46/EC have been replaced with references to the GDPR.
Simultaneously, the legal reference to the national data protection legislation of Monaco has
been updated to Law No. 1.565 of 3 December 2024 relating to the protection of personal data
including the conditions of implementation set out by Sovereign Order.
Finally, Article 6 and the additional data protection safeguards included in Annex III have
been slightly adjusted to align the wording and ensure continued compliance with the GDPR.
•
Signing and the text of the Amending Protocol
The text of the Amending Protocol to the Agreement is submitted to the Council together with
this proposal. The text of the joint declarations is submitted together with this proposal.
In accordance with the Treaties, it is for the Commission to ensure the signing of the
Amending Protocol, subject to its conclusion at a later date.
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2025/0220 (NLE)
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the Union, of the Amending Protocol to the Agreement
between the European Union and the Principality of Monaco on the exchange of
financial account information to improve international tax compliance in accordance
with the Standard for Automatic Exchange of Financial Account Information in Tax
Matters developed by the Organisation for Economic Cooperation and Development
(OECD)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 115, in conjunction with Article 218(5) and the second subparagraph of Article 218(8)
thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1)
The Agreement between the European Union and the Principality of Monaco on the
exchange of financial account information to improve international tax compliance in
accordance with the Standard for Automatic Exchange of Financial Account
Information in Tax Matters developed by the Organisation for Economic Cooperation
and Development (OECD)
1
(‘the Agreement’) has enhanced mutual assistance in tax
matters between the Contracting Parties and improved international tax compliance.
Important changes to the Common Reporting Standard (CRS) were approved at
international level on 26 August 2022
2
and have been introduced in Union legislation
with the amending of Council Directive 2011/16/EU by Council Directive (EU)
2023/2226
3
.
On 21 May 2024, the Council authorised the Commission to open negotiations with
the Principality of Monaco for an amendment of the Agreement to reflect the changes
to the CRS approved at the international level. The negotiations were successfully
concluded by the initialling of an Amending Protocol to the Agreement between the
European Union and the Principality of Monaco on the exchange of financial account
information to improve international tax compliance in accordance with the Standard
for the Automatic Exchange of Financial Account Information in Tax Matters
developed by the Organisation for Economic Cooperation and Development (OECD)
(‘the Amending Protocol to the Agreement’).
(2)
(3)
1
OJ L 332, 19.12.2003, p.42. OJ L225, 19.08.2016, pages 1 to 40; OJ L280, 18.10.2016, pages 1 to 2.
https://www.oecd.org/en/publications/international-standards-for-automatic-exchange-of-information-in-tax-
matters_896d79d1-en.html,
pages 62 to 102.
OJ L, 24.10.2023 [http://data.europa.eu/eli/dir/2023/2226/oj]
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3
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(4)
The Amending Protocol to the Agreement expands the scope of reporting for CRS to
include new digital financial products, such as Specified Electronic Money Products
and Central Bank Digital Currencies whilst simultaneously introducing more detailed
reporting requirements and strengthened due diligence procedures. It also updates the
legal references to the data protection legislation of the Contracting Parties and the
applicable data protection safeguards.
Therefore, the Amending Protocol to the Agreement should be signed on behalf of the
Union and the attached joint declarations should be approved.
The European Data Protection Supervisor was consulted in accordance with Article
42(1) of Regulation (EC) No 2018/1725 of the European Parliament and of the
Council,
(5)
(6)
HAS ADOPTED THIS DECISION:
Article 1
The signing, on behalf of the Union, of the Amending Protocol to the Agreement is hereby
authorised, subject to the conclusion of the said Amending Protocol
4
.
Article 2
The Joint Declaration of the Contracting Parties on the Agreement and the Annexes, the Joint
Declaration of the Contracting Parties on Article 5 of the Agreement and the Joint Declaration
of the Contracting Parties on the entry into force and implementation of the Amending
Protocol are hereby approved.
Article 3
This Decision shall enter into force on the day following that of its publication in the
Official
Journal of the European Union.
Done at Brussels,
For the Council
The President
4
The text of the Amending Protocol to the Agreement is published in OJ L, […].
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