Financial Crime World

French Money Laundering Definitions and Enforcement: A Comprehensive Overview

France has a strict stance against money laundering and related financial crimes. French law considers money laundering as a criminal offense, and there are jurisdiction and enforcement mechanisms in place at the national and international levels. Below is a comprehensive overview of France’s money laundering definitions, laws, and enforcement.

1. Criminal Enforcement and Jurisdiction

1.1 Prosecution Authorities

  • Local prosecutors handle most money laundering cases.
  • Paris-based prosecutors, such as the financial national prosecutor (PNF) and the anti-organized crime prosecutor (JUNALCO), have exclusive or concurring jurisdiction in specific situations.

1.2 Elements of the Offense

To establish money laundering as a criminal offense, two elements must be proven:

  1. An act of money laundering (facilitating false justifications, placing, concealing, or converting crime proceeds)
  2. A predicate offense (any French law offense, including tax evasion)

1.3 Extraterritorial Jurisdiction

  • French law provides quasi-extraterritorial jurisdiction for investigating and prosecuting money laundering offenses committed abroad.
  • French courts can prosecute money laundering committed abroad related to a predicate offense that occurred in France.

2. Regulatory and Administrative Requirements

2.1 Authorities and Requirements

  • Anti-money laundering requirements come mainly from European directives and regulations.
  • Various administrative authorities enforce these regulations, depending on the sector.

2.2 Self-Regulatory Organizations

  • Professional organizations, such as bar councils, chambers of notaries, regional chambers of court commissioners, and sports federations, also impose anti-money laundering requirements on their members.

3. Anti-Money Laundering Requirements for Financial Institutions

3.1 Scope of Application

Financial institutions and certain non-financial businesses and professions are subject to anti-money laundering requirements.

3.2 Payments and Money Transmission

  • Fiduciary means of payment, cashless means, and tokens are subject to anti-money laundering requirements.

3.3 Cryptocurrency Industry

  • The cryptocurrency sector is subject to anti-money laundering requirements.
  • Digital asset service providers must register with the French financial markets authority (AMF) before starting activities.

3.4 Non-Fungible Tokens (NFTs)

  • Currently, there is no legal framework for NFTs, but a bill is under discussion before the French Parliament to address this issue.

3.5 Compliance Programs

  • Financial institutions and designated businesses have been required to maintain compliance programs since 2014.
  • These programs include specific procedures for identifying and verifying customer identities, risk assessments, and internal control mechanisms.

4. General

4.1 Future Developments

  • At the European level, efforts are underway to modernize the anti-money laundering regime.
  • Proposed changes include increased supervision, greater powers for financial intelligence units, and harmonized access to beneficial ownership registers.
  • The creation of the European Anti-Money Laundering Authority is also being discussed.

4.2 FATF Recommendations

  • France’s anti-money laundering regime generally meets the FATF Recommendations.
  • Challenges remain in areas such as the supervision of professionals involved in the activities of legal entities and the real estate sector.

4.3 Evaluations and Reviews

  • The Financial Action Task Force last evaluated France in May 2022.
  • Reports and evaluations are publicly available online.

4.4 Accessing Relevant Laws and Regulations

  • French anti-money laundering laws, regulations, and guidance are publicly available online.
  • Translations can be easily obtained.