Cameron Miranda
France's first anti-money laundering (AML) law was established on 12 July 1990, with the institution of Law No. 90-614. This law was a response to the G7 Summit at La Grande Arche in July 1989, which aimed to address the growing concern for combating money laundering and promoting a healthy economy. Since then, France has continued to develop its AML framework, with the European Union (EU) also playing a significant role in shaping AML policies in France.
| Characteristics | Values |
|---|---|
| First AML law in France | Law No. 90-614 of 12 July 1990 |
| What it aimed to do | Control financial transactions and prevent and detect money laundering activities by financial organisations |
| What it was called | Law on the participation of financial organisations in the fight against money laundering from drug trafficking |
| What it led to | The creation of TRACFIN (Treatment du renseignement et action contre les circuits financiers clandestins) |
| TRACFIN's role | TRACFIN is the French Financial Intelligence Unit (FIU) and it operates under the authority of the Ministry of Finance and Economy |
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What You'll Learn
Law No. 90-614, 12 July 1990
Law No. 90-614, published on 12 July 1990, was the first law in France to institute a system for controlling financial transactions and preventing and detecting money laundering activities, specifically targeting the proceeds of drug trafficking. This law set out the obligations of financial institutions and other designated businesses in relation to anti-money laundering (AML) regulations.
The law applies to a wide range of entities, including banks, financial institutions, insurance companies, and designated non-financial businesses such as lawyers, notaries, real estate agents, and casinos. These entities are required to comply with AML regulations, including verifying customer identity, monitoring transactions, and reporting suspicious activities to Tracfin, France's financial intelligence unit. Tracfin analyses suspicious transaction reports and collaborates with law enforcement and international agencies to combat financial crime and trace clandestine financial flows.
The Law No. 90-614 is part of France's broader AML framework, which is based on the Monetary and Financial Code (Code monétaire et financier), EU AML Directives, and FATF recommendations. The Monetary and Financial Code outlines France's financial system regulations, including AML requirements, and is regularly updated to incorporate successive European AML directives.
Since the introduction of Law No. 90-614, France has continued to strengthen its AML legislation through a series of wide-reaching reforms. This includes the implementation of EU regulations such as the Fifth Anti-Money Laundering Directive (5AMLD), which France incorporated into its national laws to reinforce measures against financial crime and improve transparency in beneficial ownership.
In summary, Law No. 90-614, published on 12 July 1990, was a pioneering legislation in France's fight against money laundering, particularly in relation to drug trafficking proceeds. It established the foundation for France's current comprehensive AML framework, which continues to evolve through regulatory reforms and the adoption of EU directives.
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Criminal Code (Articles 222-38, 324-1, 421-1, 421-2-2)
France's Anti-Money Laundering (AML) framework is based on the Monetary and Financial Code (MFC), EU AML Directives, and FATF recommendations. The country's financial intelligence unit, Tracfin, receives suspicious transaction reports (STRs) via the Ermes platform. Tracfin then analyses this financial data to trace clandestine financial flows and identify patterns of illegal activities.
The Criminal Code prohibits money laundering (Articles 324-1 and seq.) and terrorist financing actions (Articles 421-1 and 421-2-2). Article 324-1 defines money laundering as:
> Facilitating by any means the false justification of the origin of property or income of the perpetrator of a felony or a misdemeanour that has brought that person a direct or indirect benefit; or assisting by investing, concealing or converting the direct or indirect property obtained through felony or misdemeanour.
Article 421-2-2 defines terrorism financing as:
> The supplying, pooling or directing of funds, value or goods, or providing advice to that end, with the intention or understanding that they will be used (in full or in part) to commit one or more acts of terrorism.
Under French law, money laundering is generally understood as an operation that consists of concealing the fraudulent origin of property or sums of money, that is to say, making them appear legal when they are in fact the result of a crime.
Other specific provisions in the Criminal Code prohibit money laundering deriving from specific activities such as drug dealing (Article 222-38), customs offences (Article 415 of the Customs Code) or fiscal fraud (Article 1741 of the General Tax Code). Violation of anti-money laundering due diligence obligations set forth in the MFC can also constitute criminal offences (Articles 561-18 and 574-1 of the MFC).
The maximum penalty for natural persons is a fine of €1.875 million (Article 324-9 of the Criminal Code). In the case of aggravated money laundering, the maximum penalty is a fine of €3.75 million. Additional penalties may be imposed, such as dissolution or prohibition from engaging in a professional activity for a maximum period of five years. Individuals face a maximum penalty of 10 years' imprisonment and a fine of €225,000 (Article 421-5 of the Criminal Code).
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Monetary and Financial Code (Book V, Title VI)
France's Anti-Money Laundering (AML) framework is based on the Monetary and Financial Code, which outlines the country's financial system regulations, including AML requirements. The Code monétaire et financier (Monetary and Financial Code) is part of a series of wide-reaching reforms that aim to prevent and combat money laundering activities.
Book V: Service Providers of the Monetary and Financial Code outlines the obligations of various entities in combatting money laundering, terrorist financing, prohibited lotteries, gaming and betting, and tax evasion and fraud. Title VI of Book V, specifically addresses these obligations, which include customer due diligence, identification and verification procedures, and reporting suspicious activities.
Article L. 561-2 of the Monetary and Financial Code identifies specific actors, such as lawyers' cash settlement offices, credit managers, and clerks of commercial courts, who are subject to AML regulations. It also sets forth conditions under which certain activities are subject to these regulations. Article L. 561-36 mentions the supervisory authorities of self-regulatory organisations and professional associations that monitor compliance with AML requirements. These authorities have the power to investigate and sanction individuals within their jurisdiction for AML violations.
Furthermore, the Monetary and Financial Code establishes the reporting requirements for large currency transactions, including cross-border cash transfers exceeding €10,000. France's financial intelligence unit, Tracfin, receives and analyses suspicious transaction reports to identify patterns of illegal activities. Tracfin also collaborates with national and international agencies to share intelligence and support law enforcement investigations.
The Code monétaire et financier (Monetary and Financial Code) serves as a critical component of France's AML framework, providing a comprehensive set of regulations and obligations to prevent and combat money laundering activities.
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European Anti-Money Laundering Package, 2024
France's Anti-Money Laundering (AML) framework is based on the Monetary and Financial Code, EU AML Directives, and FATF recommendations. The country's financial system regulations, including AML requirements, are outlined in the Code Monétaire et Financier (Monetary and Financial Code).
The first law instituted to control financial transactions and prevent and detect money laundering activities in France was Law No. 90-614 of 12 July 1990. This law focused on the participation of financial organisations in the fight against money laundering from drug trafficking. Since then, France has continued to strengthen its AML framework by incorporating EU AML directives into its national laws and implementing additional regulations and reforms.
In 2024, the European Union took significant steps to enhance its anti-money laundering efforts with the introduction of the European Anti-Money Laundering Package. This package, adopted by the Council on May 30, 2024, and endorsed by the European Parliament on April 24, 2024, aims to protect EU citizens and the EU's financial system from money laundering and terrorist financing. The package consists of three texts published in the Official Journal of the European Union on June 19, 2024:
- Regulation (EU) 2024/1620: This regulation establishes the European Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), headquartered in Frankfurt. AMLA will have direct and indirect supervisory powers over high-risk entities in the financial sector and will coordinate with national supervisors to ensure compliance with AML/CFT obligations.
- Regulation (EU) 2024/1624 ("AMLR6"): This regulation unifies AML/CFT rules across the EU and includes rules directly applicable to the private sector. It extends the scope of supervised entities to include all crypto-asset service providers.
- Directive 2024/1640 ("AMLD6"): This directive focuses on preventing the use of the financial system for money laundering or terrorist financing and sets out mechanisms for member states to implement.
The European Anti-Money Laundering Package of 2024 strengthens the EU's ability to combat financial crime and ensures a consistent approach across the bloc. It also addresses challenges posed by cross-border transactions and the involvement of non-EU entities in money laundering activities. With these measures, the EU aims to close loopholes and make it increasingly difficult for criminals and terrorists to legitimise their illicit proceeds through the financial system.
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National Sanction Commission (NSC)
France's Anti-Money Laundering (AML) framework is based on the Monetary and Financial Code (otherwise known as the Code monétaire et financier), EU AML Directives, and FATF recommendations. The first AML law in France was instituted on 12 July 1990, as Law No. 90-614, which focused on the participation of financial organisations in the fight against money laundering from drug trafficking.
The National Sanction Commission, known as the CNS in French, is tasked with sanctioning non-compliance with applicable AML compliance requirements by professions that do not have a specific supervising authority. These include actors such as real estate letting agents, casinos, art dealers, operators accepting cash payments above specific thresholds, and dealers in precious or gemstone dealers.
The CNS's role is outlined in Article L. 561-36 of the Monetary and Financial Code, which mentions the various specific supervisory authorities of self-regulatory organisations and professional associations that supervise the compliance of their members with AML requirements. These authorities have the power to investigate and sanction persons within their jurisdiction in relation to AML rules.
The CNS is one of the supervisory authorities that enforce AML requirements, alongside the French Authority of Prudential Control and Resolution (ACPR) and the French Financial Markets Authority (AMF). The ACPR, for instance, supervises banks, financial institutions, and insurance companies to ensure financial stability and compliance with AML regulations.
The EU Regulation 2024/1620 of 31 May 2024, which establishes the European Anti-Money Laundering Authority (ALMA), will further strengthen the role of the CNS and other supervisory authorities in France.
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Frequently asked questions
The first AML law in France was published on 12 July 1990.
The law, known as Law No. 90-614, aimed to control financial transactions and prevent and detect money laundering activities, particularly those related to drug trafficking.
Multiple entities are involved in enforcing AML laws in France, including the French Authority of Prudential Control and Resolution (ACPR) and the French Financial Markets Authority (AMF).
Since the introduction of Law No. 90-614, France's AML regulatory framework has undergone significant expansion and reform. This includes the integration of successive European AML directives into French law, such as the Monetary and Financial Code, and the publication of additional guidelines by relevant supervisory authorities.
