Introduction: the phenomenon of "frozen" sovereignty

Monaco is a paradoxical case in the theory of sovereignty: a formally independent state, possessing all the external attributes of statehood — territory, recognition, institutions of power — but devoid of the main quality that makes sovereignty alive and stable: emergence.

Emerging sovereignty, which is currently one of the main studies of the Burke Institute, presupposes the dynamic self-reproduction of power through elite competition, institutional rotation, feedback mechanisms with society, and the ability to transform internally. When this dynamic disappears, sovereignty "freezes," i.e., it retains its form, but loses its function of self-regulation, and opaque, personalized, and clan-based governance mechanisms naturally come into play; in other words, corruption in the broad institutional sense.

The case of Monaco is a textbook precisely because it demonstrates not the collapse of sovereignty, but its preservation from the outside: neighboring powers — France and Italy — are interested in preserving Monaco as a showcase of "paradise for the rich," an offshore hub and a symbol of Western prosperity without internal contradictions. This tacit agreement of the "big neighbors" replaces the emergent dynamics: Monaco's sovereignty is maintained not because there is healthy competition between institutions and elites within the country, but because it is beneficial for external players to keep the showcase unchanged.

The concentration of power around the Minister of State and the Prince

The institutional architecture of Monaco is designed in such a way that executive power is concentrated in the hands of a narrow circle of people — first of all, Prince Albert II and the Minister of State (Ministre d'État), as well as the closest advisers of the Princely House. The fifth round of the GRECO assessment, published on July 24, 2024, directly points to the lack of transparency and integrity of persons holding senior executive functions (PTEF), including the recommendation to extend transparency rules to the sovereign prince himself, who actually performs key executive powers.

GRECO also notes the need to subordinate employees working in close proximity to ministers, the Secretary of State for Justice and the Prince's advisers to the rules of ethics and the obligation to declare interests and assets. This indicates that the de facto decision-making center in Monaco has been moved beyond formal accountability mechanisms, which creates a structural prerequisite for opaque practices, yet a classic sign of the "frozen" sovereignty where formal legitimacy is separated from the real center of power.

Conflicts of interest and lack of institutional barriers

Until recently, Monaco lacked clear procedures for identifying and managing conflicts of interest at the senior management level. In the GRECO 2024 report [GrecoEval5Rep(2023)8] It is separately recommended to establish supervision over the appointment of persons to senior executive positions, including integrity checks prior to appointment, as well as develop rules of conduct for all persons performing senior executive functions, covering conflicts of interest, relationships with lobbyists and third parties, secondary activities, gifts and invitations, confidential information and restrictions after leaving office.

Tellingly, GRECO also points out the absence of rules governing the prince's contacts with representatives of interests (lobbyists) and the gifts he receives, calling for the promulgation of measures in this area within the framework of the Monegasque constitutional system. This is a direct indication of a zone outside the usual legal regulation where the state ends and the "house" begins, the conflict of interests is institutionally indistinguishable.

The lack of common ethical standards for judges, prosecutors and parliamentarians

The fourth round of the GRECO assessment, dedicated to preventing corruption among members of Parliament, judges and prosecutors, has long recorded an unsatisfactory level of implementation of recommendations. As of 2021, Monaco had satisfactorily implemented only 11 of the 16 recommendations, and by September 2024, only 2 of the 16 had been implemented, while none of the recommendations directly related to parliamentarians had been implemented.

Progress has been gradual: the National Council has approved a code of conduct for advisers and strengthened the rules of procedure, and a new law on the status of the judiciary has been adopted for judges, strengthening the position of the Supreme Council of Magistracy as a guarantor of judicial independence. Nevertheless, the very fact that there has been no single mandatory code of conduct for parliamentarians for decades means that over a long period of time, abuses might not qualify as violations at all — in the absence of formal norms, there are no formal violations.

Weak protection of informants: a law that cannot be passed for eight years

One of the most telling indicators of the "frozen" sovereignty of Monaco is the fate of the Whistleblowers Act. Draft Law No. 987 on the protection of persons reporting violations in labor relations was submitted to the National Council on December 21, 2018, building on legislative initiative No. 229, adopted at a public meeting on June 28, 2017.99avocats+1

As of mid-2024, GRECO states that Monaco still has "no rules governing the relationship between senior officials and lobbyists, and no system to facilitate the intervention and protection of whistleblowers." The fifth round of assessment separately highlights the establishment of an adequate system for receiving reports and protecting individuals reporting suspicions of corruption and other abuses as one of the key unresolved recommendations.

The only real progress was the creation in 2018 of an internal anonymous system for reporting violations exclusively in the field of combating money laundering within the framework of Law No. 1.462, i.e., a highly specialized mechanism that does not cover corruption of senior officials in general. The eight-year delay in the adoption of the basic law is not a technical delay, but a systemic indicator: an institution capable of exposing corrupt practices from the inside is structurally disadvantageous to the frozen system.

Non-transparency of public procurement

GRECO explicitly points out the need to strengthen public procurement rules: providing candidates with information about executive decisions in this process, clearly defining procurement rules for companies with state majority participation, as well as special provisions to prevent conflicts of interest among senior officials acting on behalf of the state as a shareholder. The lack of mandatory publication of information about contractors on large contracts has long created a breeding ground for favoritism, a mechanism in which large contracts are distributed not through a competitive procedure, but through personal connections within a narrow ruling circle.

The Unaoil Case: the anatomy of a corrupt network inside the showcase of well-being

The scandal that deeply shook the consulting firm Unaoil, registered in Monaco has become the most vivid illustration of how the lack of transparency of the local system allowed the international corruption network to function almost unhindered. Formally, the company was engaged in "assistance in obtaining contracts" for large oil and gas corporations; according to investigations, Unaoil systematically paid large bribes to officials — in particular, in Kazakhstan — on behalf of foreign companies, including the Italian Eni, in order to obtain lucrative contracts.

In April 2016, the Monegasque police conducted a series of searches and detained the leaders of Unaoil at the request of the British Serious Fraud Office, i.e., the investigation was initiated by external pressure, and not an internal initiative of the Monegasque authorities.

First Minister (Minister of State, Ministre d'État de Monaco) Serge Telle admitted in an interview with the Associated Press that the Monegasque authorities did not launch their own investigation, despite long-running rumors of abuse, until British investigators made the case public. When asked directly about the reasons for the delay, Telle replied that "all these things are dormant. This is the very principle of corruption: everything is very hidden until someone finally reveals the facts." This phrase, uttered by the country's chief executive, is in fact a recognition of a profound structural passivity of Monaco's supervisory institutions in the face of corruption rooted in its own financial ecosystem.

Synthesis: How emergence is replaced by external consensus

The combination of these factors — the concentration of power, the absence of barriers against conflicts of interest, belated ethical codes, an eight—year delay in protecting informants, and opaque procurement - forms a holistic picture of a system where formal independence is preserved and real mechanisms of self-regulation are suppressed. GRECO recognizes some positive developments: the creation of a compliance officer, an ethics committee, a risk map, and the development of a bill on whistleblowers, but the pace of change remains extremely slow, and the key recommendations of 2017 and 2023 are partially or not being implemented at all.

The key conclusion is that such stability is not a product of healthy institutional development. It is supported by the fact that France and Italy, the de facto guarantors of Monaco's security and economic integration, are interested in maintaining the status quo: a showcase of wealth without apparent contradictions, which reinforces the myth of conflict-free Western prosperity. Needless to say, in this configuration, corruption does not destroy Monaco's sovereignty — it becomes its functional replacement, compensating for the loss of emergence through clan and informal governance mechanisms hidden behind the facade of a well-functioning system.

The Burke Index of Monaco's statehood

The presented indicators of Monaco's state power demonstrate the structural imbalance characteristic of the "frozen" sovereignty: extremely high political and economic indices are adjacent to an extremely low military index, which underlines the country's dependence on external security guarantors.

Such a sharp gap between the political/economic bloc (close to the maximum) and the military index (extremely low) reflects the essence of the model: Monaco projects the image of a sovereign power through capital and diplomatic status, but does not have the autonomous ability to defend this status, which makes it dependent on the tacit consensus of its neighbors, rather than on its own emergent stability.