France – Know Your Customer (KYC) Rules

 

 

France remains an attractive venue for money laundering because of its sizable economy, political stability, and sophisticated financial system. Narcotics and human trafficking, smuggling, and other crimes associated with organized crime are among its vulnerabilities.

France can designate portions of its customs territory as free trade zones and free warehouses in return for commitments in favor of employment. France has taken advantage of these regulations in several specific instances. The French Customs Service administers these zones.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: YES

France – KYC covered entities

 

The following is a list of Know Your Customer entities covered by French Law:

    • Banks
    • Credit institutions
    • Money-issuing institutions
    • Investment firms
    • Money exchangers
    • Investment management companies
    • Mutual insurers and benefit institutions
    • Insurance brokers and intermediaries
    • 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 bets and horse-racing tips

France – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 20,252 in 2010

The following is a list of STR covered entities covered by French Law:

    • Banks
    • Credit institutions
    • Money-issuing institutions
    • Investment firms
    • Money exchangers
    • Investment management companies
    • Mutual insurers and benefit institutions
    • Insurance brokers and intermediaries
    • 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 bets and horse-racing tips

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 276 in 2010
Convictions: 35 in 2010

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The French government has a comprehensive anti-money laundering/counter-terrorist financing (AML/CFT) regime and is an active partner in international efforts to control money laundering and terrorist financing. France maintains the ability to designate individuals or entities under French domestic authorities in addition to those designated by European Union (EU) regulations. France and the Unites States have exchanged large amounts of data in connection with money laundering and terrorist financing. France still does not have the capacity to share forfeited assets with other jurisdictions.

France applies the 2006/70/CE European Union directive by which politically exposed persons from the EU states may benefit from simplified vigilance procedures, but only in a limited number of cases.

In September 2011 the Prudential Control Authority (ACP) took several measures to improve its ability to fight money laundering and terrorism financing. The ACP has provided guidelines to help financial institutions define and research ―the effective beneficiary‖ of money laundering or terrorism financing. The ACP also has defined new reporting obligations for money exchangers.

France should continue its active participation in international organizations and its outreach to lower-capacity recipient countries to combat the domestic and global threats of money laundering and terrorist financing.