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French Settlement Offices Struggle with AML Compliance Requirements
Paris, France - The French authorities have emphasized the importance of Anti-Money Laundering (AML) compliance requirements for settlement offices, also known as CARPA, which are responsible for managing and settling commercial transactions.
Background on AML Regulations in France
According to article L. 741-1 of the Commercial Code, Clerks of the Commercial Courts are required to ensure that these settlement offices comply with AML regulations. This is in line with article L. 561-2 of the Monetary and Financial Code, which specifically identifies CARPA as subject to AML rules and compliance requirements.
AML Compliance Requirements for CARPA
In an effort to detect and prevent money laundering and terrorism financing risks, CARPA are required to design and implement a risk-based AML compliance program. This program must include:
- Regular customer due diligence
- Internal controls
- Reporting of suspicious activities to Tracfin, the French financial intelligence unit
Specific Requirements for Different Types of Institutions
The French authorities have established specific AML compliance requirements for different types of institutions. For example:
- Payment, credit, and electronic money institutions are required to set up an independent audit function
- Other covered institutions may only need to do so under certain circumstances
Expert Opinion on AML Compliance in France
In a statement, Sara Koski, Ariane Fleuriot, Clément Allais, and Tarik Chenaoui from DLA Piper said: “The AML compliance requirements for CARPA in France are complex and stringent. It is essential that these settlement offices take the necessary steps to ensure they are compliant with these regulations.”
Consequences of Non-Compliance
The French authorities have warned that failure to comply with AML regulations can result in severe penalties, including fines and even criminal prosecution.
Key Takeaways
- CARPA in France are subject to AML rules and compliance requirements
- Settlement offices must design and implement a risk-based AML compliance program
- The program must include regular customer due diligence, internal controls, and reporting of suspicious activities to Tracfin
- Different types of institutions may have varying AML compliance requirements
Sources
- Article L. 741-1 of the Commercial Code
- Article L. 561-2 of the Monetary and Financial Code
- DLA Piper’s Anti-Money Laundering and Counter-Terrorism Financing Guide
About the Authors
Sara Koski, Ariane Fleuriot, Clément Allais, and Tarik Chenaoui are experts in anti-money laundering and counter-terrorism financing from DLA Piper.