French Committee Recommends New Measures Against Illicit Finance

By Gabriel Vedrenne

A panel of French lawmakers has proposed 25 new measures to combat financial crime, including by expanding the government’s authority to seize suspicious funds and subjecting cryptocurrencies to anti-money laundering requirements.

Following six months of investigation, France’s National Assembly’s policy evaluation and control committee published a 241-page report Thursday outlining the extent of financial crime and how the country’s financial intelligence unit and other authorities can improve their response to new types of fraud and other forms of illicit finance.

According to the report, French authorities recorded almost 409,000 financial infractions in 2018, an increase of 20 percent since 2013. The most common financial crimes include payment fraud, off-the-books employment, online account intrusions, counterfeiting and tax fraud.

Two of the 25 reforms pitched Thursday directly affect financial institutions: the first would see the creation of a certified public digital-identification system to make online banking more secure, the second entails legislation to facilitate broader, more uniform and timely exchanges of data between investigators and banks.

“We are facing an increase in crime, but despite a rather intense legislative activity and the creation of new authorities, we are observing a gap between the intentions and the results,” French MP Ugo Bernalicis, on of two authors of the report, told ACAMS “We need a larger budget but also better coordination of all the players.”

In response to the growing menace and scandals exposed by the Panama Papers leaks and other caches of incorporation records and banking data, French lawmakers adopted four new laws against corruption, terrorist financing, and tax and securities fraud from 2013 to 2018.

“We created many new departments and authorities, but there are not enough people manning the shop,” Bernalicis said. “Resources are lacking, and our investigators are snowed in.”

France’s Parquet National Financier, or PNF, illustrated the problem in simple numerical terms in the report.

In 2014, the then-nascent judicial agency, which only investigates financial crimes of high impact, anticipated a staff of 22 magistrates who would handle a maximum of eight cases in a single year. As of 2018, PNF employs a staff of 18 magistrates, each of whom averages an annual workload of more than 30 cases.

The report attributes the enforcement gap to a lack of coordination as well as a lack of resources, and finds that French authorities, including the Finance Ministry and Interior Ministry, work in silos while individual instances of financial crime often straddle their respective jurisdictions.

Countries that structure their legal and regulatory regimes to ensure interagency cooperation achieve better results against financial crime, Veronique Bruneau-Bayard, a lawyer with CMS Francis Lefebvre in Paris, said, citing the United States and the United Kingdom as examples.

“If France wants to be more effective, it must reorganize its systems, pool resources and cooperate,” she said.

The report’s authors emphasize that a cooperative approach has been used with great success against terrorist organizations in recent years.

French agencies have also obtained better results in the rare instances that they have exchanged specialists and shared knowledge of specific violations outside of terrorism, according to the report. Moreover, a cross-ministerial system enhances elected representatives’ visibility into government agencies, making them more accountable, the report states.

The report separately recommends empowering the French anti-corruption authority, or AFA, to impose larger penalties on a unilateral basis.

“The AFA must be able to sanction in order to be respected, it cannot only be an accompanying authority,” Bruneau-Bayard said.

Contact Gabriel Vedrenne at

Topics : Anti-money laundering , Counterterrorist Financing
Source: France
Document Date: March 29, 2019