France Introduces Tougher Asset Freeze Measures to Combat Money Laundering and Terrorist Financing
In a bid to strengthen its anti-money laundering and combating terrorist financing (AML/CFT) regulations, France has introduced new measures aimed at freezing assets and prohibiting the provision or use of funds or economic resources. This move is part of an effort to ensure that financial institutions are better equipped to detect and prevent illicit activities.
New Obligations for Reporting Entities
According to a recent order issued by French authorities, reporting entities, including banks and insurance companies, must put in place internal procedures for detecting transactions carried out on behalf of individuals subject to asset freezes or prohibitions. These entities must also specify in their outsourcing contracts the tasks entrusted to external service providers, as well as the obligation of these providers to inform them of any significant developments.
- Reporting entities have a one-year period from the publication of the order to bring their outsourcing contracts into compliance with the new requirements.
- The order is set to take effect on March 1, 2021.
Establishing a System for Detecting Illicit Activities
The order also requires reporting entities to establish a system for detecting transactions carried out for the benefit of individuals subject to asset freezes or prohibitions. This includes funds and economic resources held, owned, possessed, or controlled by such individuals.
Independent Oversight
French authorities have emphasized the importance of independent oversight in ensuring compliance with AML/CFT regulations. Reporting entities must ensure that there is a clear separation between persons carrying out operational activities and those responsible for controlling operations.
- Senior management and supervisory bodies must be aware of the entity’s compliance with AML/CFT regulations and take necessary measures to address any deficiencies.
- Regular monitoring of AML/CFT systems is required, with findings or concerns reported to relevant authorities.
Enhanced Transparency
The French authorities have emphasized the importance of transparency in combatting money laundering and terrorist financing. Reporting entities are required to provide information to the relevant authorities whenever asset freezes or prohibitions are implemented.
International Cooperation
France’s new measures are part of its commitment to international cooperation in combating money laundering and terrorist financing. The country has been working closely with other nations to develop common standards and best practices in this area.
Conclusion
The new regulations aim to strengthen France’s AML/CFT framework and ensure that financial institutions are better equipped to detect and prevent illicit activities. By introducing these measures, France demonstrates its commitment to combating money laundering and terrorist financing at the international level.