Title: France’s Money Laundering Battle: Strengths, Challenges, and Future Plans
Overview
Paris, 17 May 2022 - France, with its robust anti-money laundering (AML) and counter-terrorist financing (CFT) framework, is continuously working to combat money laundering threats including tax fraud and drug trafficking, and high-level terrorist financing risks [1]. In a report released by the Financial Action Task Force (FATF) following its March 2022 Plenary meeting, France’s strengths, challenges, and future plans are highlighted [2].
France’s Successes
France’s successes in AML and CFT comprise effective law enforcement, substantial confiscation of criminal assets, and extensive international cooperation [2]. The country has successfully adapted its legal framework to mitigate risks, such as:
- Terrorist financing
- Tax fraud
- Drug trafficking
The French financial sector generally understands their AML and CFT obligations, and the supervision of the virtual asset sector is under development [2].
Weaknesses
Despite progress, some weaknesses persist. The risk-based supervision of designated non-financial businesses and professions, specifically real estate agents and notaries, is insufficient [2]. Although non-financial compliance with AML and CFT obligations has improved, it remains limited for real estate agents and business service providers [2]. Some sectors, including real estate and business services, have inadequate awareness of their obligations, particularly concerning beneficial ownership, politically exposed persons, and suspicious transactions reporting [2].
Results
French authorities have achieved notable successes in using financial intelligence, conducting money laundering investigations, and prosecutions [2]. High-end money laundering cases are a priority, leading to a high conviction rate [2]. However, limited investigative resources impact the duration of complex investigations [2].
Asset Seizure
France is committed to seizing criminal assets, confiscating around EUR 4.7 billion worth of proceeds, property, and other assets from criminals each year [2]. The country has a well-established practice of international cooperation with foreign counterparts via mutual legal assistance and informal channels [2].
Combating Terrorism and Terrorist Financing
France has seen significant success in fighting terrorism and terrorist financing [2]. Authorities collaborate effectively and systematically investigate terrorism cases with a terrorist financing component, achieving a 93% conviction rate for prosecutions [2]. The French legal and operational framework enables coordinated efforts against the risk of terrorism and its financing [2].
Recommendations
The report commends France for its proactive role in proposing terrorist financing individuals or entities for designation to international sanctions lists [2]. However, further action is needed to ensure effective monitoring and prevention of the potential misuse of the non-profit sector for terrorist financing [2]. The recent reforms to implement targeted financial sanctions without delay must be followed through and fully implemented [2].
Conclusion
France has made significant strides in the fight against money laundering and terrorist financing, but there is room for improvement [1]. Ongoing efforts to strengthen the supervision of non-financial businesses and professions, as well as enhanced awareness and understanding of AML and CFT obligations, are crucial [1].
[1] France’s Money Laundering Battle: Current Status and Future Priorities [2] FATF Report: France’s AML/CFT System. March 2022.