Financial Crime World

France’s Global Approach to Financial Crime: IMF Report Highlights Progress in Anti-Money Laundering and Counter-Terrorism Financing Regime

The International Monetary Fund (IMF) recently released a technical note on France’s progress in combating money laundering and terrorist financing (ML/TF) as part of the Financial Sector Assessment Program (FSAP). This article outlines the significant strides France has made, as outlined in the report, to strengthen its Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework.

Strengthening AML/CFT Framework

During the period covered by the report (December 2018 to October 2019), France made substantial progress in enhancing its AML/CFT framework, particularly in the following areas:

  1. Risk identification and investigation
    • The French authorities have increased efforts to identify and prevent terrorist financing (TF) activities in the wake of the 2015 Paris attacks.
    • A specialized unit within the Paris prosecutor’s office has been instrumental in identifying and investigating networks funding terrorist activities.
    • Banks have been engaging in the fight against TF by using increasingly sophisticated systems to detect suspicious transactions and reporting them to the Financial Intelligence Unit (Tracfin).
  2. Legal and regulatory framework
    • France has implemented a risk-based approach to AML/CFT supervision.
    • The French Prudential Supervision and Resolution Authority (ACPR)’s improved onsite inspections and use of sanctions against non-compliant banks are evidence of this approach.
  3. Collaboration between regulatory bodies
    • To address the risks of cross-border crimes, the French authorities are prioritizing more effective risk assessment and supervision of lawyers, real estate agents, and trust and company service providers.
    • The Directorate General for Competition, Consumer Affairs and Fraud Control (DGCCRF) and the National Bar Council (CNB) are encouraged to collaborate to ensure unified understanding and compliance with ML/TF risks and develop consistent approaches to risk-based monitoring and disciplinary actions.
  4. Adapting to the Fintech sector
    • France has made significant progress in updating its legislation and promoting responsible innovation in the Fintech sector.
    • However, there is a need for further collaboration and enforcement to ensure that Fintech entities fully comply with AML/CFT regulations.

Key Findings and Recommendations

The IMF report showcases France’s substantial progress in implementing a robust AML/CFT framework to tackle various financial crimes. Some of the report’s main findings and recommendations include:

  • France has made progress in risk identification, risk-based supervision, and the use of financial intelligence to combat ML/TF activities.
  • Collaboration between regulatory bodies, financial institutions, and the legal profession is crucial to maintaining an effective system for detecting and preventing financial crimes.
  • A more coordinated approach to risk assessment and supervision of intermediaries, such as lawyers, real estate agents, and trust and company service providers, is encouraged.
  • Adapting to the growing Fintech sector and ensuring that Fintech entities fully comply with AML/CFT regulations should remain a priority.