Financial Crime World

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French Guiana’s Hidden Threat: How to Detect Financial Crime in the Overseas Territory

France has been ranked among the top OECD countries for effectively tackling financial crime, but a recent report from the Financial Action Task Force (FATF) highlights critical gaps in detecting and combating illicit financial activities related to drug trafficking in its overseas territories.

The Unknown Risks of Drug Trafficking

French Guiana’s strategic location makes it a significant hub for drug trafficking. Cocaine from South America is often smuggled into mainland France through maritime routes, but the proceeds are difficult to track due to a lack of formal international cooperation. Funds from crimes such as theft, fraud, and misuse of corporate funds are frequently transferred to bank accounts in the sub-region, where it is challenging to establish cooperation with local authorities.

Key Findings

  • French Guiana’s maritime access to the Mediterranean and the Atlantic via both EU and overseas borders makes it a significant hub for drug trafficking.
  • Cocaine from South America is often smuggled into mainland France through these routes, but the proceeds are difficult to track due to a lack of formal international cooperation.
  • Funds from crimes such as theft, fraud, and misuse of corporate funds are frequently transferred to bank accounts in the sub-region, where it is challenging to establish cooperation with local authorities.

The Role of Real Estate Agents

FATF also reported that supervision in the non-financial sector, particularly among real estate agents and notaries involved in the real estate industry, is “insufficient.” This is a critical point, as real estate is prone to illicit financial activities. The report recommended that France increases the number of money laundering technical specialists across all its competent authorities.

Recommendations for Real Estate Supervision

  • Enhance supervision of real estate agents and notaries involved in the industry.
  • Increase the number of money laundering technical specialists across all competent authorities.

What Can Be Done?

To address these gaps, experts recommend that French Guiana and other overseas territories take the following steps:

  1. Implement a specific strategy for combating drug trafficking and money laundering in the region.
  2. Increase cooperation with local authorities to track and investigate financial crimes.
  3. Enhance supervision of real estate agents and notaries involved in the industry.
  4. Develop more technical specialists to identify and combat money laundering.

By taking these steps, French Guiana can better detect and prevent financial crime, ensuring that its economy remains strong and legitimate.