France's Overseas Money Laundering Threats

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A recent evaluation report by the Financial Action Task Force (FATF) has highlighted that France’s overseas territories are vulnerable to illicit financial dealings related to drug trafficking. Despite efforts to combat money laundering and terrorist financing, critical gaps remain in the country’s control over profits from illegal trade.

Efforts to Combat Money Laundering

The FATF report praised France for its “robust and sophisticated framework” to fight money laundering and terrorist financing. This includes the creation of dedicated institutions such as:

The Central Office for the Fight Against Corruption and Financial and Tax Offences (OCLCIFF)
The National Financial Prosecutor’s office (PNF)

Since 2014, the PNF has recovered over €10 billion for the public purse.

Vulnerabilities in French Overseas Territories

The report noted that France’s maritime access to the Mediterranean and Atlantic via its overseas territories makes it vulnerable to drug trafficking. The proceeds from theft, fraud, and misuse of corporate funds are often transferred to bank accounts in the sub-region, where international cooperation is difficult to establish.

Risks Run Higher Than Reported

A source involved in the FATF report’s creation emphasized that the real risks likely run higher than what is suggested in the report. “It is true that there have been improvements, especially with TRACFIN’s remarkable work,” said the source. “However, the real risks likely run higher than what is suggested in the report.”

Recommendations for Improvement

The report highlighted the importance of improving supervision in the non-financial sector, particularly for:

Real estate agents involved in the real estate sector
Notaries

FATF recommended that France increase the number of money laundering technical specialists across all its competent authorities.

Ongoing Vigilance Needed

Didier Banquy, president of COLB, the national advisory board for AML/CFT, said that France had “considerably strengthened” its operational and legal arsenal to tackle threats in the country. However, he added that ongoing vigilance is essential to adapt and update risk assessment as criminal practices evolve rapidly.

Conclusion

The FATF evaluation report highlights the challenges faced by French overseas territories in combating financial crimes related to drug trafficking. While efforts have been made to improve anti-money laundering practices, critical gaps remain in controlling profits from illegal trade.