Anti Money Laundering (AML) in France
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Money laundering in France is a persistent problem. Despite maintaining a sound and comprehensive Anti-Money Laundering (AML) system, France remains an attractive venue for money laundering because of its sizable economy, political stability, and sophisticated financial system. Common methods of money laundering in France include the use of bank deposits, foreign currency and gold bullion transactions, corporate transactions, and purchases of real estate, hotels, and works of art.
The Government of France (GOF) first criminalized money laundering related to narcotics trafficking in 1987 under Article L-627 of the Public Health Code. In 1988, the Customs Code was amended to incorporate financial dealings with money launderers as a crime and the criminalization of money laundering was expanded to cover the proceeds of all crimes in 1996. In January 2004, the French Supreme Court judged that joint prosecution of individuals was possible on both money laundering charges and the underlying predicate offense. Prior to this judgment, the money laundering charge and the predicate offense were considered the same offense and could only be prosecuted as one offense.
In 1990, the obligation for financial institutions to combat money laundering came into effect with the adoption of the Monetary and Financial Code (MFC), and France’s ratification of the 1988 UN Drug Convention. The 1996 amendment to the law also obligates insurance brokers to report suspicious transactions. In 1998, the covered parties were expanded to include non-financial professions (persons who carry out, verify or give advice on transactions involving the purchase, sale, conveyance or rental of real property).
In 2001, the list of professions subject to suspicious transaction reporting requirements expanded to include legal representatives, casino managers, and persons customarily dealing in or organizing the sale of precious stones, precious materials, antiques, or works of art. Following the 2001 amendments, the law covers banks, moneychangers, public financial institutions, estate agents, insurance companies, investment firms, mutual insurers, casinos, notaries, and auctioneers and dealers in high-value goods.
The list was expanded again in 2004 to include chartered accountants; statutory auditors; notaries; bailiffs; judicial trustees and liquidators; lawyers; judicial auctioneers and movable auction houses; groups, clubs, and companies organizing games of chance: lotteries, bets, sports and horse-racing forecasts; institutions/unions of pensions management and intermediaries entitled to handle securities.
As a member of the European Union (EU), France is obligated to implement all three EU money laundering directives, including the revision of Directive 91/308/EEC on the prevention of the use of the financial system for the purpose of money laundering and (Directive 2001/97/EC), which was transposed into domestic French legislation in 2004. The EU adopted the Third Money Laundering Directive (2005/60/EC) in late 2005.
France's AML laws and regulations were fully revised with the transposition of the third AML Directive in 2009.
AML Training in France
The Customs Code and The Monetary and Financial Code require French financial institutions to establish appropriate training programs to combat money laundering within the country.
The Economy of France
France maintains the sixth largest economy in the world and benefits from a GDP of 2.8 trillion USD. Attracting at least 75 million foreign tourists per year, it is the most visited country in the world and earns the third largest income in the world from tourism. Additionally, France possesses ample agricultural resources, a substantial industrial sector, and a highly skilled work force.
In recent years, the government’s main goal has been to create jobs and to reduce the high unemployment rate. In 2007, the government successfully decreased the unemployment rate by an estimated 8%. However, in the same year it also introduced a controversial labor reform. Such reforms have proven to be so unpopular with the public in the past that the current reform may hinder the ability to stimulate the country’s economy.
France maintains a strong presence in power, public transport, and defense industries. France's leaders are committed to preserving social equity by means of laws, tax policies, and social spending; the government continues to promote economic policies that support investment and domestic growth in a stable fiscal and monetary environment.
Banking In France
On June 1, 1998, the European Central Bank (ECB) was established with the main objective of supporting the monetary policy of the ECB and other tasks of the Eurosystem and the European System of Central Banks (ESCB).
As a member of the Eurosystem since 1999, the Banque de France plays an integral part in the European System of Central Banks (ESCB). The Banque De France contributes to the preparation and implementation of the euro area single monetary policy in France, as well as acting as the central bank to the nation. Its duties as the Central Bank include monitoring financial markets and payment systems, ensuring the circulation of banknotes and coins, and protecting individuals and entities in the economic and financial market.
The currency in France is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are: Austria, Belgium, Cyprus, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain. The Euro is the single currency for more than 320 million Europeans.
The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to balance the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn.
The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins.
Other Key Statistics of France
Time Zone: CET (UTC+1).
Location: Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea, between Italy and Spain.
Population: 66,616,416 (2014 estimate.)
Languages Spoken: French (official).