Anti Money Laundering (AML) in France

Money laundering in France is a persistent problem. Despite maintaining a sound and comprehensive Anti-Money Laundering (AML) system, France remains an attractive venue for money laundering because of its sizable economy, political stability, and sophisticated financial system. Common methods of money laundering in France include the use of bank deposits, foreign currency and gold bullion transactions, corporate transactions, and purchases of real estate, hotels, and works of art.

The Government of France (GOF) first criminalized money laundering related to narcotics trafficking in 1987 under Article L-627 of the Public Health Code. In 1988, the Customs Code was amended to incorporate financial dealings with money launderers as a crime and the criminalization of money laundering was expanded to cover the proceeds of all crimes in 1996. In January 2004, the French Supreme Court judged that joint prosecution of individuals was possible on both money laundering charges and the underlying predicate offense. Prior to this judgment, the money laundering charge and the predicate offense were considered the same offense and could only be prosecuted as one offense.

In 1990, the obligation for financial institutions to combat money laundering came into effect with the adoption of the Monetary and Financial Code (MFC), and France’s ratification of the 1988 UN Drug Convention. The 1996 amendment to the law also obligates insurance brokers to report suspicious transactions. In 1998, the covered parties were expanded to include non-financial professions (persons who carry out, verify or give advice on transactions involving the purchase, sale, conveyance or rental of real property).

In 2001, the list of professions subject to suspicious transaction reporting requirements expanded to include legal representatives, casino managers, and persons customarily dealing in or organizing the sale of precious stones, precious materials, antiques, or works of art. Following the 2001 amendments, the law covers banks, moneychangers, public financial institutions, estate agents, insurance companies, investment firms, mutual insurers, casinos, notaries, and auctioneers and dealers in high-value goods.

The list was expanded again in 2004 to include chartered accountants; statutory auditors; notaries; bailiffs; judicial trustees and liquidators; lawyers; judicial auctioneers and movable auction houses; groups, clubs, and companies organizing games of chance: lotteries, bets, sports and horse-racing forecasts; institutions/unions of pensions management and intermediaries entitled to handle securities.

As a member of the European Union (EU), France is obligated to implement all three EU money laundering directives, including the revision of Directive 91/308/EEC on the prevention of the use of the financial system for the purpose of money laundering and (Directive 2001/97/EC), which was transposed into domestic French legislation in 2004. The EU adopted the Third Money Laundering Directive (2005/60/EC) in late 2005.

France's AML laws and regulations were fully revised with the transposition of the third AML Directive in 2009.

AML Training in France

The Customs Code and The Monetary and Financial Code require French financial institutions to establish appropriate training programs to combat money laundering within the country.

The Economy of France

France maintains the sixth largest economy in the world and benefits from a GDP of 2.8 trillion USD. Attracting at least 75 million foreign tourists per year, it is the most visited country in the world and earns the third largest income in the world from tourism. Additionally, France possesses ample agricultural resources, a substantial industrial sector, and a highly skilled work force.

In recent years, the government’s main goal has been to create jobs and to reduce the high unemployment rate. In 2007, the government successfully decreased the unemployment rate by an estimated 8%. However, in the same year it also introduced a controversial labor reform. Such reforms have proven to be so unpopular with the public in the past that the current reform may hinder the ability to stimulate the country’s economy.

France maintains a strong presence in power, public transport, and defense industries. France's leaders are committed to preserving social equity by means of laws, tax policies, and social spending; the government continues to promote economic policies that support investment and domestic growth in a stable fiscal and monetary environment.

Banking In France

On June 1, 1998, the European Central Bank (ECB) was established with the main objective of supporting the monetary policy of the ECB and other tasks of the Eurosystem and the European System of Central Banks (ESCB).

As a member of the Eurosystem since 1999, the Banque de France plays an integral part in the European System of Central Banks (ESCB). The Banque De France contributes to the preparation and implementation of the euro area single monetary policy in France, as well as acting as the central bank to the nation. Its duties as the Central Bank include monitoring financial markets and payment systems, ensuring the circulation of banknotes and coins, and protecting individuals and entities in the economic and financial market.

French Currency

The currency in France is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are: Austria, Belgium, Cyprus, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain. The Euro is the single currency for more than 320 million Europeans.

The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to balance the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn.

The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins.

Other Key Statistics of France

Time Zone: CET (UTC+1).

Location: Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK; bordering the Mediterranean Sea, between Italy and Spain.

Population: 66,616,416 (2014 estimate.)

Capital: Paris.

Languages Spoken: French (official).

Anti Money Laundering (AML) in Cayman Islands

As the world’s fifth largest financial center, the Cayman Islands are home to a well-developed offshore financial center that provides a wide range of services, such as private banking, brokerage services, mutual funds, and various types of trusts, as well as company formation and company management.

The Cayman Islands Monetary Authority (CIMA) is responsible for the licensing, regulation, and supervision of the Cayman Islands’ financial industry, which includes banks, trust companies, mutual funds, insurance companies, money service businesses (MSBs), and corporate service providers.

Established under the Proceeds of Criminal Conduct (Amendment) Law of 2003 (PCCL, the Financial Reporting Authority (FRA) replaces the former Financial Intelligence Unit (FIU) of the Cayman Islands. The FRA opened on January 12, 2004. The FRA is a separate civilian authority governed by the Anti-Money Laundering Steering Group (AMLSG), which is chaired by the Attorney General.

The Proceeds of Crime Law was enacted in September 2008, repealing the previous Anti-Money Laundering Law (the Proceeds of Criminal Conduct). The Money Laundering Regulations (2013 revision) and the Guidance Notes on the Prevention and detection of Money Laundering in the Cayman Islands (2010 revision) were amended by the Proceeds of Crime Law. The Money Laundering Regulations address one-off transactions conducted with institutions that have no physical presence in the territory in which it is incorporated, while the Money Laundering Guidance Notes provide clarification on correspondent banking relationships with shell banks.

AML Training in the Cayman Islands

The Proceeds of Criminal Conduct (Amendment) Law and the Anti Money Laundering (AML) Regulations require that financial institutions within the Cayman Islands create and implement appropriate training programs to combat illicit financial transactions from occurring in the country.

In response to a recommendation from the Caribbean Financial Action Task Force (CFATF) during their 2007 evaluation of the Cayman Islands’ money laundering regime, the Guidance Notes on Money Laundering were amended to indicate that financial institutions should have policies and procedures in place to address any specific risks associated with non-face-to-face business relationships or transactions.

The Economy of the Cayman Islands

With no direct taxation, the islands are a thriving offshore financial center. More than 68,000 companies were registered in the Cayman Islands as of 2003, including almost 500 banks, 800 insurers, and 5,000 mutual funds. A stock exchange was opened in 1997.

Tourism is also a mainstay, accounting for about 70% of the Gross Domestic Product (GDP) and 75% of foreign currency earnings. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. About 90% of the islands' food and consumer goods must be imported. The Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world.

Banking in the Cayman Islands

The Cayman Islands Monetary Authority (CIMA) serves as the Central Bank.

The CIMA was established under The Monetary Authority Law. The former responsibilities, duties, and activities of the Financial Services Supervision Department and the Cayman Islands Currency Board now fall to the CIMA, which was created from the merger of these two bodies.

The Central Bank is the issuer of legal currency, as well as the supervisor of the financial services sector.

The Cayman Islands' Currency

The currency in the Cayman Islands is the dollar (KYD), which is divided into units of 100 cents, much like the United States Dollar. The KYD is the ninth most valuable currency unit in the world.

Bank notes are issued in 1, 5, 10, 25, 50 and 100 dollar denominations.

Coins are issued in 1, 5, 10 and 25 cent denominations.

Other Key Statistics of The Cayman Islands

Time Zone: (UTC-5) .

Location: Caribbean, three-island group (Grand Cayman, Cayman Brac, Little Cayman) in Caribbean Sea, 240 km south of Cuba and 268 km northwest of Jamaica.

Population: 56,732 (2014 estimate.).

Capital: George Town.

Languages Spoken: English.

Anti Money Laundering (AML) in Canada

According to the Royal Canadian Mounted Police (RCMP), money is made from entrepreneurial crime and is then disbursed through Canada’s legitimate economy. Based on the Proceeds of Crime (POC) initiative’s reports, drug trafficking is the largest single source of these proceeds, and banks and real estate are the main destinations of the revenues.

The years 2007 and 2008 were significant in the evolution of Canada’s money laundering and terrorist financing control initiatives. The key enhancement to Canada’s regulatory legislation, Bill C-25, further expanded the reach of the law to new reporting entities, fine-tuned many of the recordkeeping and customer identification practices, and added a major level of customer due diligence (CDD) through the introduction of risk assessment requirements and the need to monitor for politically exposed foreign persons. All of this was implemented at the same time as the release of the Financial Action Task Force’s (FATF's) evaluation of Canada’s AML/CTF regime and significant changes in the senior management team at the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The RCMP are also very involved in the prevention and detection of money laundering within the country.

AML Training in Canada

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) was passed in 2000 and amended in 2001, 2006, 2008, 2010, 2013, and 2014. The Act requires that all Canadian financial institutions implement training programs to combat illicit financial activity within the country.

In December 2008, the Office of the Superintendent of Financial Institutions (OSFI) issued Guideline B-8: Deterring and Detecting Money Laundering. Then, in October 2010, the Investment Industry Regulatory Organisation of Canada (IIROC) issued the Anti-Money Laundering Compliance Guidance.

In 2013, the OSFI along with FINTRAC implemented a concurrent examination methodology where the OSFI would focus on AML risk management processes and controls needed to ensure compliance while FINTRAC focuses on the quality, volume, and timing of reports submitted by financial institutions.

The Economy of Canada

As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production, and affluent living standards. Exports account for roughly a third of GDP (which was approximately $1.432 trillion as of 2007). Canada enjoys a substantial trade surplus with its principal trading partner, the US, which absorbs 80% of Canadian exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, uranium, and electric power. During 2007, Canada enjoyed good economic growth, moderate inflation, and the lowest unemployment rate in more than three decades.

The five largest banks in Canada, known as the “Big Five,” are not just Canadian banks, but are instead better described as international financial conglomerates, each with a large Canadian banking division:

• Royal Bank of Canada
• Toronto Dominion Bank
• Bank of Montreal
• Bank of Nova Scotia
• Canadian Imperial Bank of Commerce

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada reporting to the Minister of Finance. It is the primary regulator of federally-regulated banks, insurance companies, and pension plans in Canada.

Canadian Currency

Currency withdrawn from circulation is still legal tender. Despite the introduction of new notes, the 1986 series $20, $50 and $100 are still occasionally used, but $1,000 notes are rare. Coins are issued by the Royal Canadian Mint while bank notes are issued by Bank of Canada, Canada’s central bank.

Other Key Statistics of Canada

Time Zone: (UTC - 3.5 to - 8), Summer DST - (UTC) - 2.5 to - 7)

Population: 35,675,834 (2014 estimate.)

Capital: Ottawa.

Languages Spoken: English and French.