In the global fight against money laundering (AML) and terrorist financing (CFT), France undoubtedly holds an important place. It has a meticulously designed framework with the aim of being in adherence to the European Union (EU) directives and Financial Action Task Force (FATF) recommendations, to better align with international compliance standards. Its robust regulations, such as a multi-tiered regulatory approach and sector-specific obligations, further improve France’s institutionalized strong mechanism to combat financial crime. In this article, you will find an in-depth overview of France’s AML regime and answers to common questions about AML practices in France.
Legal Framework in France (Cadre juridique)
The thorough legislation of France’s AML framework mitigates risks associated with financial crimes, and to better clarify how it achieves this, it would be helpful to mention its primary regulations. First of all, France’s financial system regulations, including AML requirements, are outlined in the Code monétaire et financier (Monetary and Financial Code). We must also mention Loi n° 2016-731 du 3 juin 2016 relative à la lutte contre le terrorisme, which can’t be ignored due to the improvements that it brings to safeguards that prevent the misuse of the financial system for terrorist activities. Another worthwhile one to mention is Ordonnance n° 2020-115 du 12 février 2020 (5AMLD). It implements the EU’s Fifth Anti-Money Laundering Directive (5AMLD) into French Law and reinforces measures against financial crime, but its focus is rather on digital assets and beneficial ownership transparency. Last but not least, Décret n° 2021-387 du 2 avril 2021 sur les obligations de vigilance is very important because it strengthens due diligence obligations, in which the emphasis is specifically on customer relationships and ongoing monitoring.
Regulatory Authorities (Autorités de régulation)
TRACFIN (Traitement du renseignement et action contre les circuits financiers clandestins)
France’s financial intelligence unit receives suspicious transaction reports (STRs) via the Ermes platform. This financial data is then analyzed to trace clandestine financial flows and identify patterns of illegal activities. The collaboration with national and international agencies also allows sharing of intelligence and supporting law enforcement investigations.
ACPR (Autorité de Contrôle Prudentiel et de Résolution)
The supervision of banks, financial institutions, and insurance companies in order to ensure financial stability and compliance with anti-money laundering (AML) regulations is ACPR’s responsibility. It takes on duties from conducting detailed audits and inspections to evaluate the effectiveness of AML and counter-terrorism financing (CTF) programs, to providing guidance to institutions on regulatory requirements and best practices for compliance. Also, it handles the responsibility of imposing penalties, sanctions or corrective measures on entities that violated AML/CTF obligations.
AMF (Autorité des Marchés Financiers)
AMF keeps investment firms and cryptocurrency service providers accountable to maintain integrity and trust in France’s financial markets. As for what it does, AML obligations on digital asset platforms and investment firms are enforced by the AMF under the framework of the Loi PACTE. Also, the supervision of the Know Your Customer (KYC) procedure implementation and risk assessments in the digital asset sector and the compliance monitoring with regulatory requirements fall under AMF’s responsibility.
DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes)
The supervision of designated non-financial businesses and professions (DNFBPs), which encompass notaries, real estate professionals, accountants, and other high-risk sectors outside the banking industry, is within DGCCRF’s scope of responsibility. Looking at its activities, one can see that it monitors compliance with AML and CTF obligations for non-banking sectors so that these industries adopt appropriate safeguards against illegal financial activities. Furthermore, its conduct of inspections and oversight provisions ensures proper implementation of KYC measures, record-keeping, and reporting of suspicious activities. Last but not least, its support in the dissemination of educational resources and guidance helps businesses meet their regulatory obligations.
AML Requirements in France (Obligations LCB/FT)
Customer Due Diligence (Vigilance à l’égard de la clientèle)
CDD is a risk-based approach (approche fondée sur les risques) and its area of use is in the identification and management of potential risks such as money laundering and terrorist financing. Identity verification through reliable sources makes up an important part of CDD, but it includes ongoing monitoring as well, which continuously reviews customer activities and transaction patterns to detect any suspicious behavior.
Enhanced Due Diligence (Mesures de vigilance renforcée)
We can not progress without mentioning EDD. EDD becomes obligatory when a higher-risk scenario comes up, but what are these higher-risk scenarios? These can be exemplified with high-risk individuals or entities involved in industries/jurisdictions more susceptible to money laundering and illicit activities, but we must also mention that individuals who hold or have held prominent public positions, as well as their close associates, require greater scrutiny due to their potential exposure to corruption risks.
Record-Keeping (Conservation des documents)
Obligated entities must retain documentation and records for auditing and regulatory purpose,s and according to Article L561-12 CMF, these must be kept for at least five years following the termination of the business relationship or the completion of a transaction. Aforementioned records must include copies of official identification documents used during the onboarding process, records of transactions, notes, and findings from ongoing monitoring and risk assessments.
Suspicious Transaction Reporting (Déclaration de soupçon)
When entities identify suspicious activities, they must promptly report them to TRACFIN (Traitement du Renseignement et Action contre les Circuits Financiers Clandestins) through the Ermes platform, in which the nature of the suspicious activity, associated individuals, and supporting evidence must be detailed. Suspicious transactions can include unusually large transfers, patterns that deviate from expected behavior, or links to high-risk jurisdictions. Also, timely and accurate reporting is essential in aiding authorities to combat financial crime effectively.
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Sector-Specific AML Requirements
In the Banking & Financial Sector, regular risk assessments are required to identify and address emerging threats in financial operations in order to ensure institutions stay one step ahead of potential risks. Comprehensive training programs must be provided to employees on Anti-Money Laundering (AML) best practices, equipping them to recognize and respond effectively to suspicious activities.
Notaries & Real Estate Agents (Professions juridiques et immobilières) must apply due diligence with verification of the identity of clients and the nature of the transaction for transactions above €10,000.
Cryptocurrency Firms (PSANs - Prestataires de Services sur Actifs Numériques) must also register with the AMF (Autorité des Marchés Financiers). This way, they can ensure their compliance with regulatory standards and foster trust in the digital asset market.
Famous Money Laundering Cases in France
| Case Name | Sector | Details | Outcome/Impact |
| Wendel Scandal | Corporate Finance | Fraudulent financial transactions by the Wendel family revealed systemic issues in KYC protocols within certain banks, enabling millions of euros in illicit flows | Exposed weaknesses in banking compliance, leading to tighter KYC regulations in France. |
| UBS France Investigation | Banking | UBS, the Swiss bank, was implicated in large-scale tax evasion and money laundering. French authorities uncovered illegal cross-border client transactions. | Resulted in a €3.7 billion penalty for UBS and highlighted the need for stricter AML oversight. |
| Art Market Scrutiny | Art Market | High-value art transactions without proper verification of beneficial ownership allowed money laundering through the art trade. | Triggered reforms in the art market, introducing stricter ownership transparency requirements. |
| Luxury Real Estate Cases | Real Estate | Exploitation of lenient regulations in luxury real estate by layering illicit funds through high-value transactions. | Reforms were initiated to ensure proper documentation and transparency in high-value property deals. |
| Danske Bank Scandal | Banking | Danske Bank's Estonian branch processed billions in suspicious transactions, involving clients from Russia and other high-risk regions. | Sparked a Europe-wide review of AML systems and forced Danske Bank to overhaul its compliance framework. |
| Helin International Case | Trade and Oil Sector | A shell company, Helin International, facilitated the laundering of proceeds linked to illegal oil trading from Africa into France via complex trade networks. | Highlighted the risks in trade-based money laundering, prompting checks in commodity and trade finance. |
Risk-Based Approach in France
France adopts a risk-based approach (RBA) to anti-money laundering (AML). In RBA, the focus is rather on the proportionality. This focus makes it way more efficient and targeted for businesses to maintain compliance measures. It is also more resource-friendly, contrary to a more generalized approach. For instance, a comprehensive National Risk Assessment (NRA) is conducted to evaluate the country's vulnerabilities and threats by analyzing sectors, transaction types, and geographic factors unique to France, so that areas most at risk of financial crimes are identified.
Firms can better understand their obligations and tailor their compliance strategies to align with their specific business models and risk exposure, thanks to the sector-specific guides issued by regulatory bodies such as Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF).
Penalties for Non-Compliance
Individuals may face significant penalties that can go up to €5 million and for firms, these fines could go as high as €100 million or 10% of their global annual turnover, whichever is higher. Article L574-1 CMF is designed to address severe breaches and ensure accountability through the judicial system by making violators subject to stringent legal action that may include criminal charges. Beyond the monetary loss, a firm’s reputation in the market and operations can be severely damaged due to the measures or other sanctions like the suspension or cancellation of operating licenses and public censure imposed by regulatory bodies such as the ACPR (Autorité de Contrôle Prudentiel et de Résolution) and AMF (Autorité des Marchés Financiers).
Recent Developments in AML Compliance (2024–2025)
French AML regulations are visibly in development to align with EU and international expectations. We can list several updates to better exemplify this. One notable update is the Enhanced Transparency Requirements, which marked a significant step towards greater transparency in financial reporting and digital asset management due to the introduction and full enforcement of the DAC7 and MiCA Regulations. These regulations aim to ensure that institutions meet stricter compliance standards, cross-border activities, and crypto transactions in particular. Also, the intersection of ESG and AML deserves a mention because of which, financial institutions are now expected to integrate environmental, social, and governance (ESG) considerations into their anti-money laundering (AML) protocols. This reflects a growing demand for businesses to address sustainability and ethical practices while maintaining robust systems to detect and prevent illicit activities.
How Sanction Scanner Supports AML Compliance in France
By means of Sanction Scanner’s tools, designed to meet evolving regulatory requirements, French entities can simplify compliance. It comes with features such as global sanction screening to identify individuals/entities flagged across global watchlists (including UN and EU databases); Transaction Monitoring Automation that uses AI technology to ensure real-time detection of potential suspicious activity; and lastly, CDD/EDD Automation, which integrates seamlessly with KYC/IDV platforms.
FAQ's Blog Post
AML in France refers to the legal framework and procedures designed to detect and prevent money laundering and terrorist financing.
The principal AML authority in France is Tracfin, operating under the Ministry of Economy and Finance.
France's AML framework is based on the Monetary and Financial Code, EU AML Directives, and FATF recommendations.
Financial institutions, lawyers, notaries, real estate agents, casinos, and other designated non-financial businesses are obligated entities.
French KYC rules require firms to verify customer identity, monitor transactions, and report suspicious activities to Tracfin.
AML violations in France may result in administrative sanctions, heavy fines, and criminal prosecution.
Tracfin analyzes suspicious transaction reports and collaborates with law enforcement and international agencies to combat financial crime.
France incorporates EU AML directives into its national laws, ensuring harmonized standards across the EU for AML compliance.
