Financial Crime World

Financial Institutions’ AML Policies in French Polynesia Face Scrutiny

The European Union’s anti-money laundering (AML) directive has undergone multiple revisions since its adoption in 1990, with the most recent update being Directive (EU) 2018/843. The aim of these revisions is to prevent the misuse of the financial system for money laundering and terrorist financing.

AML Regulations in French Polynesia

In French Polynesia, AML regulations are applicable to insurance companies, as stated in articles L.755-13 and following of the Monetary and Financial Code (MFC). These regulations include:

  • Vigilance Obligation: Insurance companies must identify their customers and verify their identity before entering into a business relationship or assisting with a transaction.
  • Reporting Suspicious Transactions: Insurance companies are required to report suspicious transactions to the department mentioned in Article L. 561-23, which is responsible for receiving these reports.
  • Asset Freezing Mechanism: Article L.562-2 of the MFC sets forth an asset freezing mechanism in French Polynesia, which allows for the freezing of assets related to criminal activity.

Similarities with New Caledonia

The AML regulations in French Polynesia are similar to those in New Caledonia, with some adaptations made due to local law references and institution names. However, there may be differences in the application and enforcement of these regulations between the two territories.

Compliance and Consequences

Financial institutions operating in French Polynesia must ensure that they comply with AML regulations and report any suspicious transactions to the relevant authorities. Failure to do so could result in:

  • Severe Penalties: Financial institutions may face severe penalties for non-compliance.
  • Reputational Damage: Non-compliance can also lead to reputational damage, which can negatively impact business operations.

Conclusion

In conclusion, the AML regulations in French Polynesia are designed to prevent money laundering and terrorist financing. It is essential for financial institutions operating in the territory to be aware of these regulations and comply with them to avoid severe penalties and reputational damage.