Through its special relationship with France, Monaco participates directly in some Community policies. Monaco is an integral part of the Community customs territory (Article 3 (2) (b) Customs Code) and applies directly most measures related to Value Added Tax (VAT) and excise duties, in particular those related to the free movement of goods within the Community. The participation in the Community customs territory does not extend to the area of external trade. Preferential trade agreements concluded by the Community apply only to goods originating on the territory of the Community. Goods produced in Monaco may not claim Community origin and are generally not included in an extended application of the protocol of origin with the trade partners of the Community.

Through France, Monaco is also integrated into the Schengen area (see Decision of the Executive Committee of 23/06/1998).

In view of the introduction of the Euro, the EU Council of Ministers authorized France to negotiate a new Monetary Agreement with Monaco. It entitles Monaco, inter alia to use the Euro as its official currency, to grant legal status to Euro banknotes and coins and to issue a limited quantity of Euro coins with its own national sides. The annexes of the Agreement were updated in 2006.

The Community concluded with Monaco an Agreement regarding the application of Community legislation to pharmaceuticals, cosmetic products and medical devices which entered into force on 1 May 2004. It provides for the application of the relevant Community legislation in Monaco. However, the goods produced in Monaco are not assimilated to products of Community origin.

Furthermore, the Commission has concluded with Monaco an Agreement on savings taxation (in force since 1 July 2005).