France’s Steadfast Battle Against Money Laundering and Terrorist Financing: A Report from the FATF
Summary
Paris, 17 May 2022 – The Financial Action Task Force (FATF) released a report praising France’s efforts in the fight against money laundering and terrorist financing while suggesting improvements in certain areas.
Key Findings
- France has made significant strides in various areas, such as law enforcement, asset confiscation, and international cooperation.
- However, more attention is needed in supervising professionals involved in legal persons and the real estate sector.
Challenges and Risks
Money Laundering Threats
France faces a substantial range of money laundering threats, including tax fraud and drug trafficking, as well as a high-level risk of terrorism and terrorist financing since the 2015 attacks.
Supervision of Professionals
Currently, risk-based supervision for designated non-financial businesses and professions, specifically real estate agents and notaries, needs improvement. Moreover, non-financial compliance with anti-money laundering (AML) and counter-terrorist financing (CFT) obligations still lags behind in some sectors, particularly beneficial ownership, politically exposed persons, and suspicious transactions reporting.
Successes and Strengths
Financial Intelligence and Investigations
French authorities have seen considerable success in financial intelligence, money laundering investigations, and prosecutions, but increased staffing is required to reduce investigation durations, particularly in complex cases.
Deprivation of Assets
The commitment to confiscating criminal assets is a priority, resulting in the deprivation of proceeds, property, or other assets equivalent to EUR 4.7 billion annually.
International Cooperation
France’s international cooperation is commendable, with quality and effective mutual legal assistance and extensive utilization of informal cooperation.
Tackling Terrorism and Terrorist Financing
Proactive Approach
In its efforts against terrorism and terrorist financing, France has seen impressive results. The collaboration between prosecution, investigative, and intelligence authorities is structured and effective, with a 93% conviction rate for terrorist financing prosecutions.
Designating Individuals and Entities
France’s role in proposing terrorist financing individuals or entities for designation to European Union, United Nations, and national sanctions lists is significant. Through recent reforms, the implementation of targeted financial sanctions is streamlined.
Recommendations
The FATF highlighted several recommendations for France to maintain an effective and robust AML/CFT regime:
- Improve risk-based supervision for designated non-financial businesses and professions, particularly real estate agents and notaries.
- Enhance non-financial compliance with AML/CFT obligations, focusing on beneficial ownership, politically exposed persons, and suspicious transactions reporting.
- Monitor the non-profit sector more closely to prevent its potential misuse for terrorist financing.