Financial Crime World

France’s Anti-Money Laundering Regime: An Overview

The French anti-money laundering (AML) regime is a comprehensive framework that encompasses various aspects, including the legal framework, regulations, and enforcement mechanisms. This article provides an in-depth analysis of France’s AML regime, highlighting key points and areas for improvement.

France’s AML regime is primarily based on European Union (EU) directives, specifically:

  • Fourth Anti-Money Laundering Directive (AMLD4): This directive sets out the minimum requirements for AML measures in EU member states.
  • Fifth Anti-Money Laundering Directive (AMLD5): This directive strengthens the EU’s AML framework by introducing new rules on beneficial ownership and corporate transparency.
  • Proposed Sixth Anti-Money Laundering Directive (AMLD6): This proposed directive aims to further enhance the EU’s AML regime by standardizing European supervision, enhancing the powers of financial intelligence units, and harmonizing content and access to registers of beneficial owners.

Regulations

The French Ministry of the Economy and Finance (MEF) is responsible for implementing and enforcing AML regulations. The main regulatory bodies in France include:

  • Trésor Public (Public Treasury): This body is responsible for overseeing the implementation of AML regulations and ensuring compliance.
  • Banque de France: This central bank plays a key role in regulating and supervising financial institutions, including their AML obligations.
  • Commission des Opérations de Bourse (COB): This regulatory body oversees the French stock exchange and ensures that listed companies comply with AML regulations.

Key Requirements

France’s AML regime includes several key requirements:

Know-Your-Customer (KYC) Procedures

Financial institutions in France are required to implement effective KYC procedures, including verifying the identity of customers and beneficial owners.

Beneficial Ownership

All companies must maintain a register of beneficial owners, which is accessible to government authorities and financial institutions. However, access to this register was temporarily suspended due to a European Court of Justice ruling but has since been restored.

Payment Transparency

Payment orders for funds transfers must include accurate information on the payer and beneficiary when the payment service provider is not established in France.

Bearer Shares

Bearer shares are permitted, but only for listed companies.

Anti-Money Laundering Requirements

Real estate professionals, lawyers, notaries, and other regulated professions are subject to AML requirements.

FATF Evaluation

France’s AML regime was evaluated by the Financial Action Task Force (FATF) in 2022, with positive results in areas such as criminal prosecution, confiscation, and international cooperation. While France has a robust AML framework that is effective in many respects, there are areas for improvement, particularly in supervision of professionals and oversight of the not-for-profit sector.

Conclusion

France’s anti-money laundering regime is a comprehensive framework that aims to prevent and combat money laundering and terrorist financing. By understanding the key requirements and regulatory bodies involved, financial institutions and professionals can ensure compliance with AML regulations and contribute to a safer financial environment.