Policemen a work (finance team)
12 February 2020

Strengthening anti-money laundering and anti-terrorist financing measures

France has made action against money laundering and terrorist financing a national priority, which it is pursuing at European and international levels. In a context where financial crime relies on complex mechanisms, including organised networks, the prevention and law enforcement framework needs to be constantly adapted.
 
A new ordinance, based on Article 203 of Act no. 2019-486 of 22 May 2019 on business growth and transformation, provides in particular for measures to transpose the EU Directive (2018/843) of 30 May 2018 of the European Parliament and of the Council, known as the "5th Anti-Money Laundering Directive".

This is why many of the obligations laid down in the anti-money laundering directive have already been implemented in French law: creation of a bank accounts register, transparency of trusts established in France, and the obligation, imposed on art dealers, those involved in property leasing activities and the digital assets sector, to act against money laundering and terrorist financing.

The new ordinance reinforces the national framework on action against illicit financial flows, given the possible risks and threats to the French economy, allowing for increased levels of effectiveness to be achieved.

To this end, the ordinance:
  • extends the scope of those involved in combating money laundering and terrorist financing, as well as their activities;
  • increases the customer due diligence obligations that must be implemented by entities which must comply with the anti-money laundering and terrorist financing regime, for example in respect of transactions to and from third countries where the risk of money laundering and terrorist financing is high. The anonymous use of prepaid cards is subject to tighter measures;
  • paves the way for entering into business relationships remotely to facilitate the customer journey, while guaranteeing a high level of security and compliance with anti-money laundering and terrorist financing measures, in accordance with the procedures determined by decree;
  • increases the effectiveness and relevance of action taken by the supervisory authorities which play a pivotal role in prevention, as well as the capacity for communication between European authorities;
  • makes the register of beneficial owners of legal persons, trusts and trust funds a key element in the prevention of money laundering and terrorist financing, by requiring mandatory consultation of it by obligated entities, widening access to it and introducing a mechanism for reporting discrepancies to ensure it is as comprehensive and up-to-date as possible;
  • supplements the information available in the bank accounts register.
This ordinance and the implementing legislation that is to follow will strengthen France’s legal arsenal against money laundering and the channels of terrorist financing.