Terrorist Financing Prevention in French Polynesia: Authorities Take Step to Strengthen Controls

French authorities have taken a significant step to prevent terrorist financing in the territory by implementing two sets of guidelines from the European Banking Authority (EBA). These new measures aim to strengthen controls and reduce the risk of money laundering and terrorist financing.

Guidelines from the European Banking Authority

The EBA published its guidelines on:

• Customer Due Diligence: financial institutions should conduct thorough due diligence when opening business relationships or occasional transactions.
• Factors to Consider: financial institutions should consider specific factors when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions.

Additionally, the EBA issued guidelines on:

• Policies and Controls for Effective Risk Management: financial institutions should have effective policies and controls in place to manage money laundering and terrorist financing risks when providing access to financial services.

Response from the Autorité des Marchés Financiers (AMF)

In response, the AMF has updated its Position 2019-14 on risk factors and published a new Position 2024-02 on the provision of access to financial services. These positions apply to all entities and actors subject to AMF supervision in the field of combating money laundering and terrorist financing.

Goals of the Guidelines

The guidelines aim to:

• Limit Risk-Mitigating Practices: exclude certain types of clients, such as non-profit organizations (NPOs), from risk-mitigating practices.
• Emphasize Customer Due Diligence: financial institutions should conduct thorough due diligence and consider specific factors when assessing money laundering and terrorist financing risks.

Implementation and Benefits

The implementation of these guidelines is expected to:

• Enhance Effectiveness of Anti-Money Laundering and Counter-Terrorism Financing Regime: improve the effectiveness of French Polynesia’s anti-money laundering and counter-terrorism financing regime.
• Equip Financial Institutions with Better Tools: help financial institutions operating in the territory better identify and prevent suspicious transactions and activities.