France’s Efforts to Combat Financial Crime: A Mixed Report
Progress in Combating Money Laundering and Terrorist Financing
France has been praised by the Financial Action Task Force (FATF) for its robust framework to combat money laundering and terrorist financing. The country has made significant progress in tackling financial crime, including:
- Creation of dedicated institutions: The Central Office for the Fight Against Corruption and Financial and Tax Offences (OCLCIFF), the French anticorruption agency (AFA), and the National Financial Prosecutor’s office (PNF) have been established to combat financial crime.
- Strengthened anti-money laundering practices: France has implemented impactful reforms, including the creation of a financial crime intelligence service TRACFIN. Since 2014, the PNF has handed back over €10 billion to the public purse.
- Active role in proposing designations: France takes an active role in proposing designations to the EU and UN sanctions list.
Critical Gaps Remain in Overseas Territories
Despite these efforts, critical gaps remain in France’s control over profits from illegal trade in its overseas territories. The report highlights that:
- Drug trafficking via French Guiana and the French West Indies: Drug trafficking is a major vulnerability for France, with proceeds from offences such as theft, fraud, and misuse of corporate funds difficult to evaluate due to lack of formal international cooperation.
- Insufficient supervision in non-financial sector: Supervision in much of the non-financial sector, particularly real estate agents and notaries involved in the real estate sector, is insufficient. Real estate is an industry prone to illicit financial activities.
Recommendations for Improvement
The FATF recommends that France:
- Increases the number of money laundering technical specialists: To enhance its ability to combat financial crime.
- Develops a specific strategy for French Guiana and the French West Indies: To address drug trafficking and related issues in these territories.
Conclusion
France has made significant progress in combating financial crime, but critical gaps remain in its control over profits from illegal trade in overseas territories. The FATF report provides a framework for France to address these issues and strengthen its efforts to combat financial crime. Ongoing vigilance is necessary to adapt and update risk assessments as criminal practices evolve rapidly.