Financial Crime World

French Polynesia Struggles to Keep Pace with EU Anti-Money Laundering Policies

The European Union has been at the forefront of combating money laundering and terrorist financing through its anti-money laundering directives. In this article, we will explore French Polynesia’s struggles to keep pace with these changes.

A Brief History of EU Anti-Money Laundering Policies

  • In 1990, the European Union adopted its first anti-money laundering directive, requiring financial institutions to identify and verify client identities, monitor transactions, and report suspicious activities.
  • The EU has since revised its regulations several times to stay ahead of emerging threats, including Directive (EU) 2015/849 on preventing the use of the financial system for money laundering or terrorist financing and Regulation (EU) 2015/847 on information on the payer accompanying transfers of funds.
  • The latest revision, known as the Fifth Anti-Money Laundering Directive, came into effect in 2020, requiring financial institutions to be more vigilant and proactive in identifying and reporting suspicious activities.

Challenges Faced by French Polynesia

  • French Polynesia’s anti-money laundering regulations are based on the Monetary and Financial Code (MFC), which dates back to 1984.
  • The territory has faced several challenges in implementing EU anti-money laundering policies, including:
    • Lack of resources and expertise within the financial sector.
    • Difficulty in adapting to the evolving nature of money laundering and terrorist financing threats.

Efforts Made by French Polynesia

  • Despite these challenges, the French Polynesian government has made efforts to improve its anti-money laundering regulations.
  • In 2020, the government adopted a new law aimed at strengthening the country’s anti-money laundering framework.
  • The law requires financial institutions in French Polynesia to implement enhanced due diligence measures, including:
    • Customer identification and verification procedures.
    • Stricter reporting requirements for suspicious transactions and activities.
    • A new asset freezing mechanism allows authorities to freeze assets suspected of being linked to money laundering or terrorist financing.

Work Still Needed

  • While progress has been made, there is still much work to be done in French Polynesia to ensure that its anti-money laundering regulations are fully compliant with EU standards.
  • The territory’s financial sector will need to continue to adapt and improve its practices to stay ahead of the evolving threats posed by money laundering and terrorist financing.