Countries/Jurisdictions of Primary Concern - France
France’s banking, financial, and commercial relations, especially with Francophone countries, make it an attractive venue for money laundering because of its sizeable economy, political stability, and sophisticated financial system. Public corruption, narcotics and human trafficking, smuggling, and other crimes associated with organized crime generate illicit proceeds.
France can designate portions of its customs territory as free trade zones and free warehouses in return for employment commitments. The French Customs Service administers these zones. France has a large informal sector, and informal value transfer systems such as hawala are used by immigrant populations accustomed to such systems in their home countries. There is little information on the scale of such activity.
Casinos are regulated. The use of virtual money is growing in France through online gaming and social networks. Sport teams have become another significant source of money laundering.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Banks, credit and money-issuing institutions, e-money institutions, investment firms, money exchangers, investment management companies, mutual insurers and benefit institutions, insurance intermediaries and dealers, notaries, receivers and trustees in bankruptcy, financial investment advisors, real estate brokers, chartered accountants, auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers, participants in stock exchange settlement and delivery, commercial registered office providers, gaming centers, companies involved in sports betting and horse racing tips, and casinos
Number of STRs received and time frame: 27,477 in 2013
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks, credit and money-issuing institutions, e-money institutions, investment firms, money exchangers, investment management companies, mutual insurers and benefit institutions, insurance intermediaries and dealers, notaries, receivers and trustees in bankruptcy, financial investment advisors, real estate brokers, chartered accountants, auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers, participants in stock exchange settlement and delivery, commercial registered office providers, gaming centers, companies involved in sports betting and horse racing tips, and casinos
money laundering criminal Prosecutions/convictions:
Prosecutions: 458 in 2013
Convictions: Not available
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
France is a member of the FATF. Its most recent mutual evaluation can be found at: http://www.fatf-gafi.org/countries/d-i/france/
Enforcement and implementation issues and comments:
The Government of France applies the 2006/70/CE EU directive by which politically exposed persons (PEPs) from EU states may benefit from simplified vigilance procedures, but only in a limited number of cases. France should review its procedures to ensure all PEPs undergo enhanced due diligence.
TracFin, France’s financial intelligence unit (FIU), has hired new officers, updated its investigative methods, and modernized its information systems, making compliance with the KYC rules easier for covered entities. More data is also made available to the public online. TracFin staff has benefitted from additional training, and further improvements are planned. TracFin is examining ways new anonymous electronic payment instruments, gold, and employee meal tickets (restaurant vouchers provided by employers) are used as alternatives to cash. TracFin also has been increasingly focused on tax and social benefits fraud, closely collaborating with the Budget Ministry and social security organizations. TracFin has signed new international cooperation agreements with Niger (May 2013), Singapore (July 2013), and the Vatican (June 2014), bringing the number of bilateral agreements to 57.
Effective November 1, 2013, the systematic communication of information (COSI) applies to transfers of cash payments or transfers via electronic payments. The system was created to improve financial information available to TracFin. Designated professionals and institutions have to provide information on transfers of funds used for payments in cash or by wire when transfers are more than 1,000 euros (approximately $1,240). The information has to be provided to TracFin within 30 days following the month in which the payment was made. Effective April 1, 2014, the COSI also applies to transfers of more than 2,000 euros (approximately $2,720) made by a client over a calendar month. The COSI is different from traditional suspicious transaction reports (STRs) as it cannot be used by TracFin to initiate investigations. It does not exempt professionals from their obligations to report STRs.
A January 2013 law includes e-money institutions among the entities subject to risk mitigation requirements, such as verifying a client’s identity. On January 29, 2014, the French banking regulator, the Prudential Control Authority (ACPR) issued a warning against the risks of fraud and money laundering arising from buying, holding, or trading virtual currencies such as bitcoins. The ACPR also stated that, in France, the exchange of bitcoins against a currency requires a license as a payment services provider.
On March 14, 2014, ACPR published AML/CFT guidelines regarding the field of wealth management in the banking and insurance sectors. These guidelines revise those adopted in 2010 and are aimed at identifying the specific risks associated with wealth management.
The Agency for the Management of Seized and Confiscated Assets (AGRASC) oversees the collection and distribution of forfeited assets in cooperation with international partners. According to the 2013 AGRASC report, France has continued to cooperate with international partners to seize assets, and has implemented sharing agreements with Luxemburg and the UK. However, the sharing of assets with international partners is not yet a routine practice.
France should examine AML reporting requirements of company registration agents, real estate agents, jewelers, casinos, and lawyers to ensure they are complying with their obligations under the law. Information on the number of convictions in 2012 and 2013 is not available; the French Justice Ministry releases the number of convictions with a two-year delay.