Money Laundering in France: A Media Perspective on Legislation, Enforcement, and Compliance

From the cobblestone streets of Paris to the sunflower fields of Provence, the French economy is a global powerhouse, attracting businesses and investors alike. However, beneath this vibrant surface lies a hidden world of financial crimes, including money laundering. In this report, we delve into the legal framework, key players, and enforcement efforts shaping France’s fight against money laundering.

Legal Authorities and Powers

1. Role of the Public Prosecutor and Procureur de la République financier (PNF)
   • The public prosecutor holds the national power to investigate and prosecute money laundering offenses.
   • The Procureur de la République financier (PNF) was established in 2013, focusing on prosecuting cases involving funds obtained from crimes like corruption, misappropriation of public funds, or tax fraud.

Criminal Offenses and Burden of Proof

2. Establishing Money Laundering as a Criminal Offense

   • Money laundering requires showing that the accused either facilitated the fraudulent justification of the origin of illicit income or placed, concealed, or converted proceeds from a predicate offense.
   • Tax evasion can serve as a predicate offense, except for petty cases.
   • In some cases, the burden of proof can be reversed.

3. Extraterritorial Jurisdiction and Corporate Liability

   • French courts have extraterritorial jurisdiction if at least one aspect of a money laundering offense occurs on French territory.
   • Money laundering involving proceeds of foreign crimes is also punishable.
   • Legal entities can be held liable for money laundering activities carried out on their behalf by their directors or representatives.

Maximum Penalties and Statute of Limitations

4. Penalties for Individuals and Legal Entities

   • Maximum penalties for individuals: five-year prison term and a €375,000 fine for aggravated offenses.
   • Maximum fine for legal entities: €1,875,000 for aggravated cases.
   • Potential confiscation of assets upon criminal conviction.

5. Statute of Limitations

   • The statute of limitations for money laundering prosecutions is six years from the crime’s commitment or concealment, non-prosecutable after 12 years.

Government Agencies and Interregional Jurisdictions

6. Money Laundering Enforcement and Interregional Jurisdictions (JIRS)
   • Enforcement against money laundering offenses is decentralized with specialized interregional jurisdictions, or JIRS, responsible for investigations and prosecutions.
   • JIRS branches are located in Paris, Lyon, Marseille, Lille, Rennes, Bordeaux, Nancy, and Fort de France.

Confiscation and Forfeiture Authorities

7. Confiscation of Assets

   • Assets can be confiscated only in the case of a criminal conviction.

8. Forfeiture During Investigation

   • All assets considered instruments or profits of a criminal offense can be subject to forfeiture during an investigation.
   • Illegally obtained proceeds can be confiscated during the trial.

Notable Cases and Anti-Money Laundering Priorities

9. UBS Case and Banking Sanctions

   • In December 2021, UBS AG and its French subsidiary were found guilty of unlawful solicitation and aggravated money laundering, receiving fines of €3.75 million and €1.875 million, respectively.
   • Confiscation orders of €1 billion and €15 million and civil damages of €800 million were also imposed upon the entities.

10. Government Priorities and Settlement Proceedings

    • French authorities focus on prevention, transparency, detection, prosecution, and sanctioning, among other priorities.
    • Financial institutions convicted of money laundering face potential dissolution, prohibition from operations, exclusion from public procurement or capital markets.

11. Anti-Money Laundering Requirements and Compliance for Financial Institutions

    • AML requirements in France are set by the Monetary and Financial Code (MFC).
    • Financial institutions must conduct customer due diligence and maintain customer records, as well as report suspicious transactions.
    • Non-compliance sanctions range from warnings, reprimands, temporary/partial prohibitions, or complete license revocations.

12. Role of Self-Regulatory Organizations in Anti-Money Laundering Enforcement

    • Self-regulatory organizations and professional associations in France are responsible for ensuring their members comply with AML requirements.
    • The MFC already imposes these requirements on these entities.

Conclusion

Money laundering is an ever-evolving crime, requiring continuous vigilance and collaboration from authorities, financial institutions, and the public. By following these regulations and staying informed, France continues its ongoing fight to prevent and punish money laundering and its financing.