The European Commission made the implementation of the AML directives a priority. The EU member-states are now to enact tighter rules to counter dirty-money risks in all areas, including prepaid cards and cryptocurrency exchanges.
However, EU AML legislation should not exclude additional national requirements that could enhance the AML framework.
Financial institutions and banks that carry out financial activities in France and other EU member states are required to comply with anti-money laundering regulations. If you intend to start a business in the EU, you may find this article helpful as it describes the basic requirements for private banking and wealth management in France which is in the EU's framework to fight against money laundering.
Commitments by financial institutions:
- KYC vigilance. If you are planning to register a company in France, please note that as part of this obligation, companies are required to develop a risk classification and use their own operational control system in order to prevent money laundering and the financing of criminal activities.
- Reporting suspicions
TRACFIN is the French anti-money laundering division. It monitors and investigates the activities of illegal financial institutions. Money Laundering Reporting Officers and compliance professionals are required to report any risks of money laundering, tax fraud and others to this authority.
Before opening an account
A registered French bank, before opening an account for a client, must perform a thorough check, including verification of identity, if it is an individual, and verification of an extract from the register, if it is a legal entity. You should also require the applicant to provide documents confirming the actual address and obtain a sample of his signature from the applicant.
Businessmen who plan to start financial activities in the EU should note that if the person who committed the predicate offense makes a profit or asset from this action, then this is seen as a tax offense. Even if it goes beyond the territorial scope of French criminal law and was committed completely abroad. If the obligations are not met by companies and responsible employees, then they can suffer. A large fine and the dissemination of information about unprofessional behavior are just some of the mildest measures of restraint for such actions. Violators can also be prosecuted. Therefore, financial institutions in France should take AML compliance very seriously.
The increase in financial crime activities in the context of the coronavirus pandemic has stimulated the need for centralized measures to increase the EU's efforts to combat money laundering.
If you have any questions on this topic, you can sign up for a personal consultation on financial regulation in France and the EU. Please contact IQ Decision UK specialists by filling out a special form on our website.