Financial information

France is effective in tackling financial crime, although some critical shortcomings remain – EURACTIV.com

France ranks among the top OECD countries for the effective fight against financial crime, according to the latest assessment report by the Financial Action Task Force (FATF). However, illicit financial trafficking linked to drug trafficking in French overseas territories is proving difficult to combat.

In an assessment report on France’s capacities to detect and combat illicit financial activities published on Wednesday 18 May, the FATF highlighted the country’s “solid and sophisticated framework for combating money laundering and the financing of terrorism,” noting that the efforts have “achieved very good results, depriving the criminals of considerable sums of money.

The FATF is an international organization dedicated to the fight against money laundering and the fight against the financing of terrorism (AML/CFT) and its proliferation. Hosted by the Organization for Economic Co-operation and Development (OECD), it aims to harmonize AML/CFT practices between countries and establish international standards to better combat illicit financial activities.

The FATF conducts mutual evaluations, where member states of the organization analyze and review each other’s regulatory system and applicable criminal tools. It also assesses the degree of implementation of FATF recommendations in national practices and legislation.

Hard-hitting reforms

According to the two-and-a-half-year-old survey, France has implemented a number of impactful reforms to strengthen anti-money laundering practices over the past decade. These include the creation of dedicated institutions, such as the Central Office for the Fight against Corruption and Financial and Tax Offenses (OCLCIFF), the French Anti-Corruption Agency (AFA) and the National Prosecutor’s Office financial (PNF).

The latter was created in 2013 to streamline the handling of legal cases related to financial crime in France and develop cross-border cooperation with international partner authorities. Since 2014, the PNF has donated more than 10 billion euros to the public treasury.

The report also highlighted the importance of the financial crime intelligence service TRACFIN, which it said “plays a vital role in the AML/CFT system”, both nationally and internationally. TRACFIN largely contributed to the adoption of the 2019 European directive on access to financial information for law enforcement.

The FATF also added that France is playing an “active role in the proposed designations on the EU and UN sanctions list”.

In a statement, Didier Banquy, president of COLB, the national AML/CFT advisory board, said France had “significantly strengthened [the board’s] operational and legal arsenal to be able to deal with these threats [the] country.”

However, he added: “It is essential to maintain constant vigilance, to adapt and update our risk assessment, as criminal practices are rapidly changing according to the different opportunities.”

The unknown risks of drug trafficking in overseas territories

Critical loopholes remain, however, in France’s control over profits from illegal trade in the country’s overseas territories.

“It’s true that there have been improvements, especially with the remarkable work of TRACFIN,” a source involved in drafting the FATF report told EURACTIV. However, the source pointed out, the actual risks are likely higher than suggested in the report.

The FATF found that France’s maritime access to the Mediterranean and the Atlantic via EU and overseas borders – such as French Guiana and the French West Indies – are “inherent vulnerability factors major” to drug trafficking, in particular for cocaine to reach mainland France.

“The proceeds of crimes such as theft, fraud and misuse of corporate funds are difficult to assess, as very often funds are transferred to bank accounts in the sub-region, where formal international cooperation is difficult. to be established,” the report reads. She added that, while the number of checks has increased in recent years, there remains a lack of a specific strategy for this geographical area.

The source who spoke to EURACTIV was also keen to point out the extent of this limitation.

The FATF also reported that the country’s supervision in much of the non-financial sector is “insufficient, in particular for real estate agents and notaries involved in a real estate sector”. This is a critical point, the insider added, pointing out that real estate is “an industry prone to illicit financial activity”.

Among other things, the FATF recommended that France increase the number of technical money laundering specialists in all its competent authorities.

[Edited by János Ammann/Nathalie Weatherald]