Monaco and the European Union
The Principality of Monaco is a third State of the European Union. The State of Monaco has nonetheless established permanent relations with the EU and accredited an ambassador to Brussels in 1999.
In addition, since 1968, the Principality has been part of the Community customs territory, due to its customs union with France (cf. community regulation 82/97 from the Parliament and the Council of 19 December 1996 which amended regulation CEE 2913/92 establishing the Community customs code - JO L17 from 21 January 1997).
Furthermore, the Franco-Monegasque agreements signed on 18 May 1963 and 26 May 2003 provide that value added tax is imposed and collected in Monaco on the same basis and according to the same rates as in France. These agreements also established a sharing account for the tax collected in France and Monaco. Consequently, Monaco is included in the European VAT system.
The Principality of Monaco also belongs to the euro zone. In order for Monaco to keep its royal right to coin money, a monetary Convention was entered into between the French Republic, on behalf of the European Community, and the Government of H.S.H.the Prince of Monaco on 26 December 2001. A new monetary Convention was signed on 29 November 2011 between Monaco, France and the European Commission. This new agreement amends the 2001 Convention as concerns the ceilings for Monegasque euro issuance.
Furthermore, the Principality of Monaco is not a signatory of the Schengen Agreement, but is a gateway to Europe, due to its easy access by sea and by air and due to the ease of movement between France and Monaco. A decision of the Schengen Executive Committee dated 23 June 1998 therefore recognised the heliport and the Port de la Condamine among the crossing points which are authorised for the crossing of external borders. This decision also authorised holders of Monegasque residence permits to move freely in the Schengen area for periods of time lower than three months.
The Principality of Monaco has also signed sectorial agreements with the European Union.
An agreement between the European Community and the Principality of Monaco concerning the application of some Community acts on territory belonging to the Principality of Monaco was signed on 4 December 2003. These acts concerned medicinal products for human and animal use, cosmetic products and medical devices.
Finally, just like the other small third European States, Monaco has led negotiations with the European Union with a view to signing an agreement providing for measures equivalent to those covered by Council directive 2003/48/CE in terms of the taxation of savings in the form of interest payments. This agreement, which was signed on 7 December 2004, came into force on 1 July 2005.
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