Compliance and anti‐money laundering regulation in France
| DOI | https://doi.org/10.1108/13590790310808709 |
| Published date | 01 April 2003 |
| Pages | 135-136 |
| Date | 01 April 2003 |
| Author | Geneviéve Bardin |
| Subject Matter | Accounting & finance |
Compliance and Anti-Money Laundering Regulation
in France
Genevie
Áve Bardin
Preventing and deterring ®nancial frauds and abuses
requires an appropriate legal framework and a
strong supervisory and regulatory system. In the
securities and futures ®eld, France has recently pro-
moted the adoption and eective implementation
of stricter conduct of business rules and practices,
for complete ®nancial regulation and as an essential
step towards greater transparency, security and
integrity of ®nancial markets.
In addition to legislative and regulatory provisions
in de®ning the general principles and prescribing the
rules of conduct deriving from them, the role given
to compliance functions within each ®nancial
institution has been enhanced. To give an example,
it is clear that the most recent French anti-money
laundering legislative steps will have an impact on
the compliance function. Supervisory authorities
attach particular importance to this function and
have taken diverse steps to promote and develop
compliance. Today most ®nancial institutions have
a compliance ocer.
THE FIGHT AGAINST MONEY
LAUNDERING AND ITS IMPACT ON
THE COMPLIANCE FUNCTION
The French anti-money laundering laws changed on
15th May, 2001 when France became the ®rst coun-
try to implement the FATF Recommendations of
2nd February, 2000. Compliance ocers will take
this into account when ful®lling their tasks. The
obligation to systematically report suspicions to
TRACFIN (Traitement du renseignement et action
contre les circuits ®nanciers clandestins) has been
extended to operations where the identity of clients
and bene®cial owners is unknown or suspicious,
and to operations carried out by ®nancial organisa-
tions located in jurisdictions identi®ed by FATF as
non-cooperative. The government has been given
the right to restrict and forbid operations with
those jurisdictions, and it has to present to Parliament
an annual report of measures taken in that respect.
In addition to the implementation of the FATF
Recommendations, France has introduced laws that
should help ®ght money laundering:
(a) A liaison committee has been created, composed
of supervisory authorities, government bodies
involved in the ®ght against money laundering
and professionals, who are obliged to report
money laundering suspicions to TRACFIN.
(b) The scope of disciplinary sanctions against
®nancial institutions that do not abide by their
reporting obligations has been widened.
(c) TRACFIN has been authorised to inform the
®nancial institutions that have reported a
suspicion, that the case be referred to the Public
Prosecutor.
THE ROLE PLAYED BY REGULATORY
AUTHORITIES IN IMPROVING
COMPLIANCE
Regulatory authorities have played and continue to
play an important role in developing proper com-
pliance by promoting this function, assisting pro-
fessionals and controlling their actions. Regulators
always consult professionals prior to adopting regula-
tion on professional practices. They have imposed the
appointment of a compliance ocer in each invest-
ment ®rm,
1
which on occasion, is subject to the
formal approval of regulators. They encourage,
ocially support and approve the adoption of speci®c
codes of conduct tailored to the speci®c needs of each
®nancial profession or ®nancial institution and their
sectors of activity.
2
Regulators also provide assistance to professionals
through two types of action. First, in publishing
guidelines on the manner in which ®nancial institu-
tions should put their internal rules, policies and
procedures into place, and secondly, in ensuring
that they are complied with. They provide assistance
and advice to compliance ocers in the day-to-day
carrying out of their activities and missions.
Other aspects of action taken by regulatory autho-
rities concern supervision and enforcement. They
closely supervise and control the implementation by
Page 135
Journal of Financial Crime Ð Vol. 10 No. 2
Journal of Financial Crime
Vol.10,No. 2,2002,pp. 135 ±136
#HenryStewart Publications
ISSN 1359-0790
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