Euro bills hanging on a washing line, symbolizing money laundering.
29 November 2018

New sensitive fields with regard to terrorist financing risks

Tracfin’s 2017/2018 Annual Report is devoted to analysis of the main typologies of emerging frauds and risks covered by the Service, largely identified through analysis of information received. This year’s report tracks the evolution of various threats already reported by Tracfin in 2015 and 2016 and highlights new sensitive fields with regard to risks of money laundering, fraud and terrorist financing.
Among other things, Tracfin’s new report emphasises:
  • The added value of financial intelligence in the overall system for combating the terrorist threat. In 2017, Tracfin handled 1,379 declarations directly bearing on suspicions of terrorist financing (+17%) and sent out a total of 685 memos (+73%), 459 to intelligence services and 226 to judicial services.
  • The ongoing development of fraud committed by organised crime groups (OCGs) – including false transfer orders, false investment offers on the forex, diamond and bitcoin markets, and fraudulent “white certificates” – continues to create major economic and financial harm.
  • Proven risks in a number of particularly sensitive activity sectors, including:
- a general lack of transparency in rules applicable to associations in terms of organisation, advertising and financial relations. Certain associations may present risks with regard to the financing of terrorism and radicalisation, requiring thought to be given to adapting the legal framework.
- The art market sector involves major risks with regard to money laundering and terrorist financing, in the face of which professionals have not implemented adequate mitigation measures, either for regulated professions (legal auctioneers and auction houses) or a fortiori for non-regulated professions (antique dealers and gallerists).
  • The fundamental risks impacting French and international systems via networks of ephemeral companies and new payment and electronic money service providers.
  • Crypto-assets present high risks with regard to fraud and money laundering due to their opacity and the anonymity they ensure, tax-fraud laundering, illegal practice of the profession of intermediary in banking and payment-service operations, and scams (price manipulation and fraudulent bitcoin investment sites).
  • Tracfin’s contribution to combating tax and social fraud. In this report, Tracfin emphasises the continuing endemic nature of VAT fraud, which constitutes a major financial challenge. As regards private individuals, Tracfin underscores the risks of fraud on inheritance tax, transfer tax and imposition of investment income tax.

Tracfin’s activity markers for 2017 and the first months of 2018 demonstrate the collective awareness and ongoing commitment of public and private partners alike in the fight against money laundering, fraud against public finances and terrorist financing:

  • In 2017, Tracfin received and analysed 71,070 items of information (+10% in 1 year). Its investigations resulted in the sending of 2,616 memos (+38%) to the judicial authority and other partners.
  • Figures on Tracfin’s activities between 1 January and 31 October 2018 show further increases: 65,509 items of information received (+13% compared with the same period in 2017). The Service sent 2,727 memos (+28%) to its partners over the same period.
Scaling up capacities for analysing financial intelligence is essential to improving detection in combating money laundering, fraud and the funding of terrorism. Consolidation and harmonisation of the legal framework have been ensured by the 5th Directive on the Fight against Money Laundering and Terrorist Financing (LCB/FT), which introduces far-reaching measures designed to correct various weaknesses in the European system that France had already partly identified. Drawing on the momentum so created, Tracfin is now giving priority to helping France prepare for upcoming assessment by the Financial Action Task Force (FATF) in 2019/2020.