Financial Crime World

France’s French Southern Territories Lag Behind in AML/CFT Regulations, Say Experts

A recent evaluation of France’s efforts to combat money laundering and terrorist financing has revealed that its overseas territories, including the French Southern Territories, are falling short in implementing key regulations.

Key Findings

  • The Mutual Evaluation report, released last year, assessed France’s compliance with the Financial Action Task Force (FATF) Recommendations.
  • While France itself was found to be largely compliant, its overseas territories were criticized for lacking sufficient measures to prevent and detect money laundering and terrorist financing.

Areas Requiring Improvement

  • Risk Assessment Framework: The French Southern Territories lack a comprehensive risk assessment framework, making it difficult to identify and mitigate high-risk activities.
  • Cooperation between Authorities: There is limited cooperation between authorities in the region, making it challenging to share information and coordinate efforts to combat financial crime.
  • Targeted Financial Sanctions: The absence of targeted financial sanctions related to terrorism and terrorist financing was identified as a significant gap.
  • Regulation and Supervision of Non-Profit Organizations: Inadequate regulation and supervision of non-profit organizations were also highlighted as areas that require improvement.

Consequences of Shortcomings

  • Experts warn that these shortcomings can have serious consequences, including the facilitation of illegal activities such as drug trafficking and weapons proliferation.
  • “The lack of robust AML/CFT regulations in the French Southern Territories poses a significant risk to the international financial system,” said an industry expert. “It is crucial that France takes immediate action to address these deficiencies and bring its overseas territories up to par with international standards.”

Timeline for Implementation

  • France has been given until next year to implement the necessary reforms, but it remains to be seen whether the country will take the required steps to ensure compliance with FATF Recommendations.

New Financial Intelligence Unit

  • The French authorities have announced plans to establish a new financial intelligence unit in the French Southern Territories to improve its ability to detect and prevent financial crime.
  • However, experts say that this initiative alone is not enough to address the deeper issues that need to be addressed.