Financial Crime World

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Mutual Evaluation Report: France’s Anti-Money Laundering and Combating Terrorism Financing Measures

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Executive Summary

This report presents key findings on the implementation of anti-money laundering (AML) and combating terrorism financing (CFT) measures in France. The evaluation highlights both positive developments and areas for improvement in France’s AML/CFT regime.

Key Findings

Risks Associated with Anonymous Bonds

  • High risk of money laundering and terrorist financing: Provisions authorizing and organizing the issuance of anonymous bonds should be repealed by French authorities.
    • Anonymous bonds present a significant risk of being used for illicit activities, which can compromise the effectiveness of AML/CFT measures.

Customer Identification and Due Diligence

  • Compliance with FATF recommendations: Legal and regulatory provisions regarding customer identification are in line with international standards and appear to be sufficiently detailed.
    • The obligation to identify customers due to suspicions of money laundering or terrorist financing explicitly concerns occasional customers.
  • Beneficial owner identification: Article L.561-5 of the CMF requires identifying the beneficial owner through any appropriate process and verifying this data through a valid written document.
    • The financial institutions are aware of these requirements, which demonstrates their commitment to adhering to AML/CFT regulations.

Enhanced Measures for Highest-Risk Customers

  • New legal framework in 2009: The new regulatory framework set up in 2009 appears to meet the requirement for enhanced measures for high-risk customers, products, or transactions.
    • Article L.561-6 of the CMF requires collecting information on the purpose and nature of the business relationship before entering into a business relationship.

Conclusion

The report highlights both positive developments and areas where further improvements are needed in France’s AML/CFT regime. By addressing these identified risks and enhancing its regulatory framework, France can strengthen its ability to combat money laundering and terrorism financing effectively.