Financial Crime World

French Financial Institutions Face Heavy Fines for AML Non-Compliance

===========================================================

In recent months, French financial institutions have faced significant fines and sanctions for breaches of anti-money laundering (AML) regulations. The Autorité de Contrôle Prudentiel et de Résolution (ACPR) has imposed fines totaling millions of euros on several institutions for non-compliance with AML requirements.

Tough Stance on AML Non-Compliance

The ACPR has taken a tough stance on AML non-compliance, imposing sanctions that include:

  • Warnings
  • Reprimands
  • Fines up to €100 million or 10% of an institution’s total revenue
  • Suspension or removal of company directors
  • Withdrawal of licenses in some cases

Notable Examples of AML Non-Compliance

One notable example is a French credit institution that was fined €50 million for failing to detect transactions carried out by individuals subject to asset freezing measures related to terrorist activities. The institution had also provided false information in its annual reports regarding its screening tools.

In 2021, the ACPR imposed fines on several financial institutions for AML non-compliance, including:

  • A French branch of a Dutch bank that was fined €3 million for non-compliance with requirements related to:
    • Risk classification
    • Customer due diligence
    • Internal management procedures
  • A subsidiary of a French insurer that was fined €2.5 million for non-compliance with requirements related to:
    • Transaction monitoring systems
    • Reporting of suspicious transactions
    • Enhanced due diligence measures

Sanctions by the Autorité des Marchés Financiers (AMF)

The AMF has also initiated sanctions procedures against financial institutions that have breached AML requirements. The AMF may impose:

  • Fines up to €100 million or 10% of an institution’s total revenue
  • Suspension or removal of company directors
  • Withdrawal of licenses

Additional Requirements and Consequences

In addition to these sanctions, French law requires financial institutions to:

  • Report suspicious transactions to the Tracfin financial intelligence unit
  • Maintain accurate records of customer due diligence and AML measures
  • Fail to comply with these requirements may face additional fines and penalties

Importance of AML Compliance

The ACPR has emphasized the importance of AML compliance, stating that it is essential for:

  • Maintaining financial stability
  • Preventing money laundering and terrorist financing

The regulator has also issued guidance on AML group policies, emphasizing the need for French financial institutions to establish robust AML measures across their global operations.

Conclusion

With the increasing focus on AML compliance, financial institutions operating in France would be wise to review their current procedures and ensure that they are in compliance with all relevant regulations and guidelines.