France’s War on Money Laundering and Terrorist Financing: A Robust Front, but Room for Improvement

Overview

Paris, May 17, 2022 - France’s battle against money laundering and terrorist financing (ML/TF) is a significant fortress in Europe. With an extensive framework in place, the country has effectively addressed numerous risks but faces challenges in select sectors.

##ML/TF Threats France grapples with various ML/TF threats, including tax fraud, drug trafficking, and terrorism financing. Following the 2015 attacks, the country remains vigilant against terrorism and terrorist financing.

Vulnerabilities and Responses

French authorities have identified vulnerabilities and updated regulations accordingly. However, designated non-financial businesses and professions, notably real estate agents and notaries, require more robust risk-based supervision in the real estate sector. Sectors such as business service providers also have room for improvement in adhering to their AML/CFT obligations.

Efforts and Achievements

Despite some sectoral shortcomings, French authorities excel in financial intelligence usage, ML investigations, and prosecutions. However, resource constraints impede the efficiency of these investigations, particularly in intricate money laundering cases.

Asset Confiscation

France’s dedication to confiscating criminal assets has been fruitful, generating annual deprivations totaling 4.7 billion euros.

International Cooperation

French law enforcement maintains a collaborative international partnership, fostering effective mutual legal assistance and utilizing informal cooperation for criminal matters.

Counter-Terrorism Measures

In the fight against terrorism and terrorist financing, France has earned commendable results, emphasizing the collaboration between prosecution, investigative, and intelligence authorities. A combined approach to terrorism investigations includes a terrorist financing component, resulting in a conviction rate of 93% for related prosecutions.

Designations and Reforms

France remains proactive in proposing ML/TF individual or entity designations to the European Union, United Nations, and national sanctions lists. Recent reforms enable swift implementation of targeted financial sanctions, but more focus is required to ensure their effective execution.

Mitigating Risks in the Non-Profit Sector

Although France successfully hinders terrorists, terrorist organizations, and terrorist financiers from utilizing assets related to financing activities, there is a need to strengthen monitoring within the non-profit sector to mitigate the risk of potential misuse. This includes conducting a more rigorous terrorist financing risk assessment within this domain.

FATF Report

The Financial Action Task Force (FATF) adopted this report during its March 2022 Plenary meeting.