Financial Crime World

France’s Fight Against Money Laundering and Terrorist Financing: A Mixed Bag of Successes and Challenges

Introduction

A recent report has praised France’s robust framework for combating money laundering and terrorist financing, highlighting notable achievements in law enforcement and confiscation. However, the country still faces significant challenges in areas such as supervising professionals involved in legal persons and real estate.

Threats and Risks

  • France is exposed to a range of money laundering threats, including tax fraud and drug trafficking.
  • The country also faces a high-level threat of terrorism and terrorist financing since the 2015 attacks.
  • Despite these risks, France has successfully identified and adapted its legal framework to mitigate them through thematic national policies.

Financial Sector and Supervisors

  • The financial sector and supervisors generally have a good understanding of money laundering and terrorist financing risks.
  • Supervision of the virtual asset sector is under development.
  • However, risk-based supervision of designated non-financial businesses and professions is insufficient in some areas, particularly real estate agents and notaries involved in the real estate sector.

Non-Financial Compliance

  • Non-financial compliance with anti-money laundering (AML) and counter-terrorist financing (CFT) obligations has improved but remains limited for real estate agents and business service providers.
  • Some sectors lack awareness of their obligations, especially regarding beneficial ownership, politically exposed persons, and suspicious transactions reporting.

Investigations and Prosecutions

  • France has achieved significant results in the use of financial intelligence, money laundering investigations, and prosecutions.
  • Competent authorities prioritize high-end money laundering cases.
  • However, a lack of specialized investigative resources impacts the duration of investigations, particularly in complex money laundering cases.

Confiscation and International Cooperation

  • The country has made confiscation of criminal assets a policy priority, with criminals being deprived of proceeds, property, or other assets valued at EUR 4.7 billion annually.
  • French authorities have a well-established practice of international cooperation with foreign counterparts, including through mutual legal assistance and informal cooperation.

Fight Against Terrorism

  • France has prioritized the fight against terrorism and its financing, achieving a conviction rate of 93% for terrorist financing prosecutions.
  • Prosecution, investigative, and intelligence authorities collaborate effectively to exchange information and include terrorist financing components in investigations.

Challenges Ahead

  • France needs to improve monitoring of the non-profit sector to prevent potential misuse for terrorist financing.
  • The country also needs to follow up on recent reforms to ensure their proper implementation.
  • Additional efforts are required to strengthen supervision of real estate agents and notaries involved in the real estate sector.