Enforcing Money Laundering and Terrorist Financing Regulations in France
France has robust laws against money laundering and terrorist financing. Various entities are responsible for enforcing these regulations in the country.
Entities Responsible for Enforcing Money Laundering and Terrorist Financing Regulations
As criminal offenses, money laundering and terrorist financing can be investigated by:
- The police force, specifically a division dedicated to fighting these crimes (OCRGDF)
- Prosecutors, known as the parquet
- An investigating judge in complex cases
When it comes to money laundering from corruption, influence peddling, tax fraud, or vote purchasing, investigations might be led by:
- A special financial prosecutor
- An investigating judge
Victims or Certain Associations can also initiate criminal proceedings for some money laundering offenses under specific conditions.
Criminal Liability for Money Laundering
Both natural and legal persons can be held accountable for money laundering. However, only:
- Crimes committed by legal entities’ corporate bodies or representatives are prosecutable.
Understanding Money Laundering under French Law
Money Laundering as a Criminal Offense
Under French law, money laundering of illicit funds is a criminal offense. Additionally, laundering specific assets or properties of certain transactions or activities may constitute a separate criminal offense. In both instances, the action requires the intention to commit the crime.
Aspects of Money Laundering
Money laundering can involve several aspects:
- Justifying the origins of tainted funds or income
- Facilitating investments, concealing, or converting criminal proceeds
- Trading assets or goods derived from criminal activities
Any property or gain derived from illicit activities is presumed to be the proceeds of a crime if there’s no justifiable motive for the investment, concealment, or conversion other than hiding the source or the identity of the beneficiary.
Knowledge of the Criminal Nature and Predicate Offenses
Both the crime itself and the actor’s awareness of its illicit nature are important factors in money laundering cases.
Money laundering may arise from illicit revenue gained through various crimes, such as:
- Drug trafficking
- Customs offenses, etc.
In such cases, knowledge of the crime itself is typically required. However, there have been exceptions to this rule.
Terrorist financing, defined as providing funds, assets, or goods to fund terrorist activities, is a separate offense with severe penalties.
There’s no restriction on the types of assets or transactions that can serve as the basis for money laundering.
Defenses and Punishments
Defenses against money laundering include immunity for those who report illicit activities to authorities and for covered institutions following applicable filing requirements. However, these defenses do not apply in cases of fraudulent dealings between the defense and the perpetrator or the funds’ owner.
Natural persons can face up to five years of imprisonment and a fine of up to €375,000. Legal entities risk fines of up to €1,875,000 and potential bans from tendering shares in public offers or listing securities on regulated markets.
If money laundering is committed regularly, professionally, or by an organized group, the penalties are more severe.
Convicted individuals may face asset forfeiture. The limitations on money laundering prosecutions include a six-year limitation period, unless the crime involves terrorist financing, which has a 20-year limitation period.
Extraterritorial Reach
French criminal law has extraterritorial reach for money laundering and terrorist financing offenses.