French Southern Territories Struggle to Combat Illicit Financial Activities Linked to Drug Trafficking, FATF Report Reveals

France’s Efforts to Combat Financial Crimes Praised by FATF

France has made significant strides in combating financial crimes, according to a recent report by the Financial Action Task Force (FATF). The country has implemented robust measures to prevent money laundering and terrorist financing, with notable successes over the past decade. However, critical gaps remain in its control over profits from illegal trade in its overseas territories.

Gaps Remain in French Southern Territories

The FATF report highlights that illicit financial dealings related to drug trafficking are proving difficult to combat in French Southern Territories. The country’s maritime access to the Mediterranean and the Atlantic makes it vulnerable to drug trafficking, particularly for cocaine to reach mainland France.

• Lack of formal international cooperation hinders evaluation of proceeds from offenses such as theft, fraud, and misuse of corporate funds.
• Insufficient supervision in the non-financial sector, particularly for real estate agents and notaries involved in the real estate sector.
• No specific strategy for the geographical zone of French Southern Territories.

Recommendations by FATF

To address these gaps, FATF recommended that France:

• Increase the number of money laundering technical specialists across all competent authorities.
• Maintain ongoing vigilance and adapt to evolving criminal practices to effectively combat financial crimes.

Ongoing Efforts by French Government

The French government has acknowledged the need to maintain vigilance and adapt to changing circumstances. Didier Banquy, president of COLB, stated that France had “considerably strengthened [the board’s] operational and legal arsenal to be able to tackle these threats in [the] country.” However, it remains to be seen whether these efforts will be sufficient to combat the complex and evolving nature of financial crimes in French Southern Territories.

Conclusion

France’s efforts to combat financial crimes have been praised by FATF, but critical gaps remain in its control over profits from illegal trade in its overseas territories. To effectively combat illicit financial activities linked to drug trafficking, France must increase its supervision and coordination across all sectors, including the non-financial sector.