France is among the countries struggling with money laundering and other financial crimes. Money laundering poses various economic and administrative threats. Countries aim to prevent money laundering with AML policies to protect their economic and administrative structures. For this reason, France has defined money laundering with AML policies and accepted it as a crime.
France, which has a developed economy, fights financial crimes by regulating financial institutions with AML regulations. These regulations are required for all institutions at risk of money laundering, especially financial institutions. For this reason, organizations under the AML obligation create AML programs to meet AML requirements. Organizations implementing AML programs protect themselves from financial crime and ensure AML compliance.
The Autorité des Marchés Financiers (AMF) is the regulatory authority that regulates the French financial markets. AMF's regulatory powers include anti-money laundering regulations. AMF has the power to set new rules and impose penalties to prevent financial crimes. AMF also represents France in international areas. AMF works to ensure that France's AML regulations comply with FATF and the European Union regulations. France must comply with the EU anti-money laundering directive. These directives generally cover aml European regulation. Examples of these directives are the EU aml 5th directive and the EU aml 6th directive. The European Union may impose sanctions on organizations that do not comply with these regulations. At this point, not only France but all member states must comply with European union anti-money laundering regulations.
Areas of Action of French Regulator
- Financial Markets
- Listed Companies
- Investment Firms, Investment Management Companies
- Token Issuers (ICO) and Digital Asset Service Providers (DASP)
Four Main AML Requirements in France
All institutions under obligation have to organize an AML program to prevent financial crimes. AML Policy refers to the company's AML control processes. Organizations must employ AML / Compliance officers to implement and control AML programs. AML Compliance officers are responsible for ensuring the company's AML compliance. In addition, the AML officer is responsible for detecting and reporting suspicious transactions.
Customer Onboarding and Monitoring
Organizations operating in France have to check their customers in various ways during client account opening according to AML policies. Organizations must first verify their customer identity by applying the "Know Your Customer (KYC)" policy. Organizations have to determine the risk level of the customer by applying the "Customer Due Diligence (CDD)" process after verifying the customer's identity. When determining the customer risk level, the customer is checked in sanctions, PEP, and banned lists. As a result of these checks, the organizations open the account if the customer is eligible to open an account.
Also, organizations carry out a customer monitoring process as it is possible for the risk level of the customers to change over time. Organizations reapply the controls in customer onboarding processes to their customers at certain time intervals. With customer monitoring, organizations detect their high-risk customers.
Transaction Monitoring tools enable organizations to detect suspicious transactions of their customers. Organizations define certain rules for customer transactions. If these rules are warned during the customer process, the system generates an alarm. The alarm is examined by the AML or Compliance officer, and if it detects a suspicious transaction, it reports to the required units. Organizations can detect financial crimes and ensure AML compliance by reducing the workload with transaction monitoring tools.
Transaction / Payment Screening tools allow the buyer or sender to be checked during customer money transfer transactions. Organizations carry out checks by scanning the receiver and sender in the sanctions, terror, PEP and banned list. If the customer transactions are not controlled, the measures of the companies against financial crimes are insufficient. Regulators impose various penalties on organizations for criminal transactions.
How Sanction Scanner Helps
Sanction Scanner provides solutions that support companies' AML compliance processes. All organizations operating in France can meet all the above AML requirements with the Sanction Scanner. Sanction Scanner’s database includes more than a thousand sanction, PEP, and banned person lists. Organizations can perform AML controls with Sanction Scanner in customer onboarding, customer monitoring, and transaction/payment screening processes.