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Financial Regulator Cracks Down on Non-Compliance with Anti-Money Laundering Regulations in French Southern Territories

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In a bid to strengthen anti-money laundering and combating terrorist financing (AML-CFT) regulations, the Autorité des Marchés Financiers (AMF) has updated its General Regulation and guidelines. The move aims to bring French Southern Territories in line with international standards and reduce the risk of non-compliance.

Scope of Application Expanded

The AMF’s updated General Regulation now extends AML-CFT obligations to:

• Managers of “Other Alternative Investment Funds” (AIFs)
• European Venture Capital Fund (EuVECA) managers
• European Social Entrepreneurship Fund (EuSEF) managers
• Branches established in France by European management companies managing French UCITS or AIFs

Why the Expansion?

The expansion is aimed at bringing all entities involved in financial activities under the purview of AML-CFT regulations, ensuring a uniform and robust compliance framework.

Guidelines Updated

The AMF has also revised its guidelines to reflect the impact of legislative changes, including the transposition of the fifth anti-money laundering directive. Key updates include:

Due Diligence Requirements

• Obligated entities must 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.
• The use of third-party services to implement due diligence obligations will be subject to additional requirements.

Assessment of Equivalence

A methodology for assessing the level of equivalence of AML-CFT obligations in third countries must be incorporated into internal procedures.

Consequences of Non-Compliance

The AMF has warned that non-compliance with AML-CFT regulations will result in severe consequences, including:

• Fines
• Reputational damage

The regulator has emphasized its commitment to enforcing these regulations and protecting the integrity of the financial system.