AML regulations in France in 6 key points

France plays a leading role in the fight against financial crime and imposes strict rules on its financial institutions in terms of money laundering and the fight against the financing of terrorism. It is essential for banks or financial services companies to fully understand compliance obligations. It is with this in mind that we have drawn up a list of the key elements to be mastered in the fight against money laundering in France.

1. The role of the Autorité des Marchés Financiers

The Autorité des Marchés Financiers (AMF) is the main French financial regulator whose mission is to monitor all financial institutions and prevent financial crime, money laundering and the financing of terrorism. An independent body, the AMF has powers to identify and prevent money laundering, in particular by establishing new rules, conducting investigations and imposing sanctions.

In a broader context, the AMF joins forces with other national and international authorities to contribute to the global fight against money laundering and define an AML policy. As a member of the Intergovernmental Financial Action Task Force (FATF), France is also working to implement the 40 recommendations of the FATF within the framework of French policy on AML/CFT.

2. Anti-money laundering legislation

The Monetary and Financial Code (Book V, Title VI) and the Penal Code (articles 324-1 and 421-1-6) define the AML and CFT rules in France. As an EU Member State, France must transpose Community law into its national legislation. France must therefore comply with the European anti-money laundering directives (AMLD) which are regularly formulated by the European Commission.

EU Member States are currently operating under the 4th AMLD Directive (4AMLD) knowing that the 5th ^Directive (5AMLD) will come into full force on January 10, 2020 and the 6th ^Directive (6AMLD) will be introduced in June 2021.

3. Data protection

French data protection legislation applies in accordance with the EU General Data Protection Regulation (GDPR) which came into force in May 2018. Complying with the rules of the GDPR is an important aspect of data protection. data, especially since the penalties for non-compliance can reach 20 million euros (i.e. 4% of global turnover). Under the GDPR, companies must:

• Establish a legal basis for processing personal data – and process that data fairly and transparently
• Retain and use data only for the specific purposes for which it was collected
• Make sure to collect only the data necessary for their activity
• Ensure that the data they collect is both accurate and up-to-date.
• Delete data that is no longer necessary for their activity
• Process personal data with integrity and confidentiality

The GDPR affects the way companies apply money laundering regulations, particularly regarding personal information. In particular, the GDPR establishes a “right to be forgotten” which allows customers to ask companies to delete their personal data in certain circumstances. While this rule conflicts with anti-money laundering data retention rules, the GDPR takes this into account by making legal requirements prevail over the right to be forgotten. Therefore, companies should only delete data after they have fulfilled their anti-money laundering obligations.

4. Supervision of transactions

Under AMF and FATF regulations, banks and financial institutions operating in France must facilitate the supervision of transactions as part of their anti-money laundering policy. This oversight process should automatically flag transactions that pose a high risk of money laundering or terrorist financing and should consider the following:

• The origin and destination of the funds (to or from high-risk countries)
• The nature or size of the transaction (unusual deposits or customer behavior)
• Legal structures or programs associated with the transaction

5. Integration and supervision of clients in the context of the fight against AML

Under French law and EU and FATF requirements, banks and financial institutions operating in France have Customer Due Diligence (CDD) obligations when onboarding new customers. They must also monitor their customers for potential money laundering activity throughout the relationship. These procedures are central to a risk-based approach to anti-money laundering and help businesses verify the identity of customers and the activities in which they are involved.

6. Regulatory developments

5AMLD: The most important Anti-Money Laundering (AML) regulation to come is the 5th ^Anti -Money Laundering Directive (5AMLD) which will come into force on January 10, 2020. The 5AMLD Directive places a strong emphasis on cryptocurrency regulation :

• Directive 5AMLD introduces a legal definition of cryptocurrency and extends existing AML/CFT regulations to cryptocurrency exchanges.
• Under 5AMLD, Financial Intelligence Units are further empowered to obtain information about cryptocurrency owners.
• Under 5AMLD, cryptocurrency exchanges must be registered with the relevant authorities. In France, they must be registered with the AMF.

6AMLD: The EU published the 6th ^Anti -Money Laundering Directive on November 12, 2018. The 6AMLD Directive must be transposed into the national law of EU Member States by December 03, 2020 and applied by banks and establishments by June 3, 2021. The main measures introduced by Directive 6AMLD include:

• A harmonized definition of money laundering offenses for the national legislation of EU Member States.
• Clarification of 22 predicate offenses relating to money laundering, including cybercrime and environmental crime.
• The qualification of the offenses of “aiding and abetting money laundering” and “self-laundering” as criminal offences.

How ComplyAdvantage Helps Financial Institutions French anti-money laundering (AML) regulations pose a major compliance challenge. The volume of data to be analyzed as part of the AML/CFT process is such that agents carrying out operations manually risk making errors and reporting false positives that could unfairly penalize customers or even harm customers. incur penalties for non-compliance.

The automated and intelligent AML solutions offered by ComplyAdvantage help companies avoid this kind of problem and significantly improve the efficiency of their compliance processes. Our AML solutions are tailored to each company’s unique needs and level of risk tolerance, allowing you to organize and prioritize data analysis and provide evidence of your financial compliance faster and more accurately. both in France and in any international regulatory environment.

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