Compliance Guidelines:

Regulatory Bodies in France

Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins)

Tracfin is a key institution in France’s AML framework. It’s a financial intelligence unit (FIU) within the French Ministry of Economy and Finance. Tracfin’s primary role is to combat illegal financial activities, including money laundering and terrorism financing. Financial institutions and certain professionals are required to report suspicious activities to Tracfin.

Banque de France (French Central Bank)

The Banque de France supervises credit institutions and ensures their compliance with AML/CFT obligations. It provides guidelines, conducts audits, and may impose sanctions on entities under its jurisdiction that fail to adhere to the AML/CFT regulations.

Autorité de Contrôle Prudentiel et de Résolution (ACPR)

ACPR is an independent administrative authority that operates under the umbrella of the Banque de France. It supervises the banking and insurance sectors in France, ensuring their solvency and compliance with the AML/CFT regulations.

Autorité des Marchés Financiers (AMF)

The AMF regulates participants and products in France’s financial markets. It also ensures the protection of investors and proper functioning of the financial markets. As part of its duties, the AMF ensures that entities under its supervision comply with AML/CFT regulations.

French Monetary and Financial Code

The French Monetary and Financial Code is a comprehensive legal framework in France that governs various aspects of monetary, financial, and banking activities in the country. This is the primary piece of legislation that governs AML regulations in France.

Anti-Money Laundering and Counter-Terrorism Financing

• Similar to other jurisdictions, the French Monetary and Financial Code contains provisions related to anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
• It outlines the obligations of financial institutions to perform customer due diligence, report suspicious transactions, and maintain records.

Article L561-7

• This article covers the establishment of internal procedures and control systems that financial institutions must put in place to prevent money laundering and terrorist financing.
• It also includes provisions for training employees in AML/CTF measures.

Article L561-9

• This article pertains to the freezing of assets and economic sanctions against individuals and entities involved in terrorist activities or subject to international sanctions.
• Financial institutions are required to comply with asset freezes and report any findings to the authorities.

Article L561-10

• This establishes the penalties for non-compliance with AML/CTF regulations.
• It specifies the fines and sanctions that can be imposed on entities and individuals found in violation of these regulations.

Article L561-11 

• This outlines the obligations of reporting entities, such as financial institutions and other entities subject to AML/CTF regulations, when conducting business with PEPs.

Customer Due Diligence

  Article L561-6: 

• This section of the article outlines the obligations related to customer due diligence (CDD), including the requirement to identify customers and verify their identity.

Article L561-7:

• It provides guidance on enhanced due diligence (EDD) measures, which are required for high-risk customers or transactions.

Article L561-8: 

• This article specifies the requirement to maintain records of customer identification and transaction information.

Article L561-9: 

• It discusses the obligation to assess and manage the ongoing business relationship with the customer.

Loi Sapin II (Sapin II Law)

Enacted in December 2016, the Sapin II Law introduced a range of measures to enhance transparency, combat corruption, and strengthen AML and CFT efforts in France.

Law No. 2016-1691

Beneficial ownership

• This law introduced significant reforms to enhance AML measures, including the establishment of a public register of beneficial ownership.

Sanctions and Penalties

• The Sapin II Law includes significant penalties for individuals and companies found guilty of corruption-related offenses. These penalties can include substantial fines, imprisonment, and debarment from public procurement contracts.

Fifth European Union Anti-Money Laundering Directive (5AMLD)

Law No. 2018-898 of October 23, 2018

Strengthening the Fight against Money Laundering and Terrorist Financing (AML5 Law).

• 5AMLD, which came into effect in January 2020, further strengthened AML and CFT regulations across the European Union, including France.
• It introduced enhanced customer due diligence (CDD) requirements, expanded the scope of AML regulations to include virtual currencies and prepaid cards, and improved transparency regarding beneficial ownership information.

Sixth European Union Anti-Money Laundering Directive (6AMLD)

• 6AMLD, implemented in December 2020, focuses on harmonizing AML penalties and strengthening the legal framework for prosecuting money laundering and terrorist financing offenses.
• It introduces more severe sanctions for AML/CFT violations and extends criminal liability to legal persons, including companies.

References:

1. EUR-Lex
2. SHERLOC (Sharing Electronic Resources and Laws on Crime)