Financial Crime World

Money Laundering Crackdown in France: A Look at the Legal Framework, Enforcing Agencies, and Anti-Money Laundering Requirements

Title

In this article, we explore the legal framework for combating money laundering in France, the role of enforcement agencies, and the obligations imposed on financial institutions and other businesses.

  • French public prosecutor is the national prosecuting authority for money laundering cases.
  • Procureur de la République financier (PNF) was established in 2013.
  • PNF can prosecute money laundering when the illegal proceeds have been obtained through specific crimes.

Criminal offense, predicate offenses, and tax evasion (2)

  • Money laundering is the justification of the origin of criminal property or income or the concealment, placement, or conversion of proceeds from a criminal offense.
  • Tax evasion is considered a predicate offense for money laundering, except for petty offenses.

Extraterritorial jurisdiction, investigating authorities, and corporate criminal liability (3)

  • French courts have jurisdiction if at least one constitutive element is committed in France or if the preparatory act is initiated there.
  • Police, gendarmerie, local public prosecutors, and the PNF handle investigations.
  • Legal entities can be convicted for money laundering based on acts committed by their directors or representatives.

Maximum penalties, statute of limitations, and enforcement at national level (4)

  • Maximum penalty for individuals is five years in prison and €375,000 fine.
  • Aggravated money laundering carries a ten-year sentence and €750,000 fine for individuals, €1,875,000 or €3,750,000 for legal entities.
  • Penalties may include fines, dissolution or prohibition, and more.
  • Prosecutors handle enforcement, with eight specialized interregional jurisdictions (JIRS).

Forfeiture/confiscation authorities and cases involving banks (5)

  • Only upon conviction, courts can impose confiscation penalties.
  • All assets that are instruments or profits of a criminal offense are subject to confiscation.
  • The Paris Court of Appeal fined Swiss Bank UBS AG and its French subsidiary for unlawful solicitation and money laundering.

Enforcing Agencies and Anti-Money Laundering Requirements

Settlement proceedings, anti-money laundering enforcement priorities, and anti-money laundering requirements for financial institutions (6)

  • Prosecutor may offer plea agreements for both money laundering and related crimes.
  • Interministerial action plan focuses on preventing risks, financial transparency, and more.
  • Financial institutions must identify, verify, obtain information, and monitor business relationships.

Cryptocurrency industry, non-fungible tokens (NFTs), and customer identification (7)

  • Since 2019, cryptocurrency-related businesses have been subject to French AML requirements.
  • E-money issuers must perform customer due diligence.
  • No specific provisions for NFTs; tokens and digital assets are subject to AML regulations.

Recordkeeping, reporting, and compliance programs (8)

  • Payment institutions, credit institutions, and electronic currency institutions must report transactions.
  • Financial institutions and businesses must set up programs and maintain records of clients and transactions.

Conclusion

To effectively combat money laundering in France, the government and financial institutions must adhere to the robust legal framework, prioritize enforcement efforts, and collaborate with relevant authorities and organizations. The goal is to prevent illicit funds from entering and circulating within the French financial system, ensuring financial transparency and stability for all citizens.