Financial Inclusion and Financial Crime in French Southern Territories Pose Challenges for Authorities

France Leads in Combating Financial Crime, But Gaps Remain in Overseas Territories

France has been recognized as a leader in combating financial crime by the Financial Action Task Force (FATF), but a recent report highlights critical gaps in its control over profits from illicit activities in its overseas territories.

A Robust Framework for Fighting Financial Crime

The FATF report praises France’s “robust and sophisticated framework” for fighting money laundering and terrorist financing, noting that efforts have led to “very good results” and deprived criminals of significant amounts. The organization commends France’s creation of dedicated institutions, such as:

• Central Office for the Fight Against Corruption and Financial and Tax Offences (OCLCIFF)
• French anticorruption agency (AFA)
• National Financial Prosecutor’s office (PNF)

These agencies have contributed to a significant increase in financial crime convictions, with over €10 billion returned to the public purse since 2014. The report also highlights the importance of the financial crime intelligence service TRACFIN, which plays a vital role in both national and international efforts to combat financial crime.

Challenges in Overseas Territories

Despite these successes, the FATF report identifies critical gaps in France’s control over profits from illicit activities in its overseas territories. These challenges include:

• Drug Trafficking: France’s maritime access to the Mediterranean and Atlantic via EU and overseas borders creates vulnerabilities for drug trafficking.
• Difficulty in Evaluating Proceeds: The proceeds from offenses such as theft, fraud, and misuse of corporate funds are difficult to evaluate, as funds are often transferred to bank accounts in the sub-region where international cooperation is limited.
• Lack of Specific Strategy: There remains an absence of a specific strategy for this geographical zone.

Recommendations for Improvement

The FATF recommends that France:

• Increases the number of money laundering technical specialists across all its competent authorities
• Improves supervision in the non-financial sector, particularly for real estate agents and notaries involved in the real estate sector
• Continues to adapt and update risk assessments to combat evolving criminal practices

Conclusion

The French government’s efforts to combat financial crime are commendable, but it is clear that more work needs to be done to address the specific challenges posed by illicit activities in its overseas territories. By implementing the FATF recommendations and increasing cooperation with international authorities, France can further strengthen its framework for combating financial crime and protecting its citizens from the proceeds of illicit activities.