France’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Compliance: Key Findings

Customer Due Diligence Measures

French authorities have taken steps to ensure compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) obligations. The following are key findings related to customer due diligence:

1. Customer Identification

• French authorities have provisions in place to identify customers, which comply with FATF recommendations and appear detailed enough.

2. Identification of Beneficial Owners

• The concept of beneficial owners is clearly defined, including the requirement to identify them before entering into a business relationship or occasional transaction.

3. Ongoing Due Diligence

• There are legal and regulatory provisions requiring ongoing due diligence throughout the duration of a business relationship, which seems to meet FATF requirements.

4. Risk-Based Approach

• France has implemented a risk-based approach that includes prioritizing updates on files for customers presenting higher risks.
• However, there’s room for improvement in systematically increasing monitoring of transactions considered high-risk.

5. Anonymous Bonds

• The report notes a concern regarding anonymous bonds, which pose a high risk of money laundering and terrorist financing due to the ability to circulate without revealing the identity of holders.
• There is a trend towards reducing these bonds’ supply, subscription, and outstanding value, but authorities are advised to consider repealing provisions for their issuance.

6. Customer Due Diligence Regime

• The regime in place for low-risk situations does not seem as detailed or comprehensive as it should be according to FATF recommendations.

Conclusion

Overall, the report suggests that while France has made progress in implementing AML/CFT measures, there are areas where improvement is necessary to fully comply with international standards.