AML Policies and Procedures in France Need Improvement, Experts Say

France has made significant progress in combating money laundering and terrorist financing, but there are still areas that require improvement. According to experts, the country needs to strengthen its supervision of professionals involved in legal persons and real estate transactions.

Challenges in Anti-Money Laundering Enforcement

Despite having a robust framework for AML/CFT (Anti-Money Laundering and Counter Financing of Terrorism) enforcement, confiscation, and international cooperation, France’s performance remains patchy. The country’s anti-money laundering regulations are not fully effective in certain sectors, including the supervision of designated non-financial businesses and professions (DNFBPs).

Supervision of DNFBPs

The French Prudential Supervision and Resolution Authority (ACPR) is responsible for supervising banks, including those that are part of large financial groups subject to prudential supervision by the European Central Bank (ECB). However, experts say that more needs to be done to ensure that these institutions are fully compliant with AML/CFT regulations.

Data Protection Laws Pose Challenges

France’s data protection laws also pose a challenge in the fight against money laundering and terrorist financing. Existing provisions adopted under the EU Data Protection Directive were maintained in the amended French Data Protection Act. This has raised concerns about the ability of authorities to access and share information effectively.

The French government is under pressure to strengthen its AML/CFT regulations and enforcement mechanisms to meet international standards. The country’s failure to do so could have serious consequences, including damaging its reputation as a major financial hub and undermining trust in its financial institutions.

Way Forward

In recent years, France has made some progress in strengthening its AML/CFT regime, but more needs to be done to address the remaining weaknesses. The government must work closely with financial regulators, law enforcement agencies, and other stakeholders to ensure that the country’s anti-money laundering policies and procedures are effective and robust.

Benefits of Improved AML Performance

By improving its AML/CFT performance, France can help protect its financial system from the threat of money laundering and terrorist financing and maintain its position as a major player in the global economy.