Financial Crime World

EU Enhances Anti-Money Laundering Measures

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The European Union has taken significant steps to strengthen its anti-money laundering (AML) regulations, aiming to combat financial crimes and protect the integrity of the financial system. The EU’s “single regulation” on AML includes provisions on customer due diligence, beneficial ownership transparency, and the use of anonymous instruments.

New Entity Established

The European Anti-Money Laundering Authority (“AMLA”) has been established to ensure compliance with AML and anti-terrorist financing requirements. The authority will have supervisory and investigative powers to monitor financial institutions and prevent money laundering.

Key Responsibilities

  • Monitor financial institutions for AML and anti-terrorist financing compliance
  • Conduct investigations to prevent money laundering
  • Provide guidance on AML regulations

Beneficial Ownership Transparency

France, one of the EU member states, has implemented a register for beneficial ownership information. However, in 2022, the Court of Justice of the EU ruled that unrestricted access to this register violated data privacy laws. France initially suspended access but restored it in January 2023 pending further review.

Impact on Businesses

  • Companies may need to provide additional documentation to prove beneficial ownership
  • Businesses may face increased scrutiny and reporting requirements

Payment Transparency Requirements

The EU requires accurate information on originators and beneficiaries be included in payment orders for funds transfers. This requirement also applies to payment instructions sent to other financial institutions.

Benefits

  • Improved transparency in financial transactions
  • Enhanced ability to detect and prevent money laundering

Bearer Shares Permitted

In France, bearer shares are permitted as long as the company is listed on the stock exchange.

Exceptions

  • Listed companies may issue bearer shares with certain conditions
  • Non-listed companies are subject to more stringent regulations

Non-Financial Institution Businesses Subject to AML Requirements

Real estate and regulated professions, such as lawyers and notaries, are subject to anti-money laundering requirements in France.

Examples of Regulated Professions

  • Real estate agents
  • Lawyers
  • Notaries
  • Accountants

Government Initiatives

The EU is reviewing its AML regime to make it more risk-based and effective. The European Parliament has reached a provisional agreement on the Sixth Anti-Money Laundering Directive, which aims to standardize supervision, give financial intelligence units more powers, and harmonize access to registers of beneficial owners.

Key Provisions

  • Standardized supervision for financial institutions
  • Enhanced powers for financial intelligence units
  • Harmonized access to registers of beneficial owners

FATF Evaluation

France’s anti-money laundering regime was evaluated by the Financial Action Task Force (FATF) in 2022. While France has made significant progress, it needs to improve oversight of certain sectors and increase staff numbers to investigate complex money laundering cases.

Recommendations for Improvement

  • Improved oversight of specific industries
  • Increased staff numbers to investigate complex cases
  • Enhanced cooperation with other authorities

Publicly Available Materials

Relevant AML laws, regulations, and guidance are available on the Internet, although not all materials are available in English.

  • EU AML regulations and guidelines
  • FATF evaluation reports
  • French anti-money laundering laws and regulations