Financial Crime World

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France Enhances Anti-Money Laundering Regime to Combat Financial Crime

France has strengthened its anti-money laundering (AML) regime to prevent and detect financial crimes, including terrorist financing. The country’s AML framework is designed to protect the integrity of its financial system and combat illicit activities.

Prohibition on Shell Banks

Credit, payment, and electronic money institutions in France are prohibited from operating with foreign shell banks that have no physical presence in their licensed countries and lack effective supervision. This measure aims to prevent the use of these banks for illegal activities.

Benefits

  • Prevents the use of shell banks for illegal activities
  • Enhances the integrity of the financial system

Reporting Suspicious Activity

French financial institutions and designated businesses must report suspicious transactions when they know, suspect, or have good reason to suspect that the amount involved originates from an offense punishable by a custodial sentence of more than one year or is linked to the financing of terrorism. The sole criterion for reporting is suspicion that the amount comes from an infraction.

Key Requirements

  • Report suspicious transactions when there is a suspicion of illegal activity
  • The sole criterion for reporting is suspicion that the amount comes from an infraction

Information Sharing

France has introduced various mechanisms to facilitate information sharing between financial institutions, regulatory bodies, and law enforcement agencies. These measures aim to enhance cooperation and coordination in detecting and preventing AML offenses.

Mechanisms

  • Financial institutions share information on suspicious transactions
  • Regulatory bodies and law enforcement agencies receive and analyze the shared information

Modernization Efforts

The French government is committed to modernizing its AML regime by taking advantage of new technologies and reducing the compliance burden on financial institutions and other businesses subject to AML controls. The country is also working to improve the effectiveness of its AML system, including through the creation of a European Anti-Money Laundering Authority.

Goals

  • Reduce compliance burden on financial institutions
  • Improve the effectiveness of the AML system
  • Take advantage of new technologies

FATF Evaluation

France has been evaluated by the Financial Action Task Force (FATF) in May 2022. While the country has achieved good results in some areas, such as criminal prosecution and confiscation, it was found to need improvement in others, including supervision of professionals involved in legal entities and real estate activities.

Areas for Improvement

  • Supervision of professionals involved in legal entities
  • Real estate activities

Accessing AML Materials

The French Monetary and Financial Code (FMFC), TRACFIN report, and FATF report are publicly available on the internet. Although not all materials are available in English, they can be easily translated.

Resources

  • French Monetary and Financial Code (FMFC)
  • TRACFIN report
  • FATF report

Conclusion

France’s enhanced AML regime demonstrates its commitment to combating financial crime and protecting the integrity of its financial system. The country’s efforts aim to ensure that its AML framework remains effective and efficient in preventing and detecting illicit activities.

Benefits

  • Combats financial crime
  • Protects the integrity of the financial system