Financial Crime World

French Southern Territories Tighten AML-CFT Regulations Amidst Global Crackdown on Money Laundering and Terrorist Financing

The Autorité des Marchés Financiers (AMF), France’s financial markets regulator, has updated its General Regulation and guidelines to strengthen anti-money laundering and combating terrorist financing (AML-CFT) measures in the French Southern Territories. This move comes as part of a broader effort to comply with the European Union’s Fifth Anti-Money Laundering Directive and respond to emerging threats.

Key Updates

  • The updates aim to align regulations with Article L. 561-2 6° of the Financial and Monetary Code, extending AML-CFT obligations to include managers of:
    • “Other Alternative Investment Funds” (AIFs)
    • European Venture Capital Funds
    • European Social Entrepreneurship Funds
  • Exempted financial investment advisers and crowdfunding investment advisers from submitting reports on their internal control systems.

Revised Guidelines

The AMF’s updated policy documents include four key guidelines:

Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing

  • Revisions take into account legislative changes requiring obliged entities to consult the register of beneficial owners of client companies listed on the Trade and Companies Register, except in cases where there is a low risk.

Guidelines on Due Diligence Obligations with Respect to Clients and their Beneficial Owners

  • Address regulatory adjustments made to accommodate the use of third-party services for due diligence obligations.
  • Reinforce additional customer due diligence measures when transactions involve high-risk countries.

Guidelines on the Concept of Politically Exposed Persons

  • Recommendations for obliged entities to develop internal procedures for assessing the level of equivalence of AML-CFT obligations in third countries, considering not only FATF lists but also mutual evaluation reports.

Guidelines on the Obligation to Report to TRACFIN

  • Updates aim to strengthen France’s stance against money laundering and terrorist financing in the wake of global efforts to combat these threats.

Significant Move

The AMF has also updated its position on due diligence by collective investment management companies with respect to tenants of buildings acquired by real estate funds they manage. This revised guideline aims to strengthen France’s stance against money laundering and terrorist financing.