French prudential regulator ups fight against money laundering and terrorism financing

France's prudential regulator (l'Autorité de Contrôle Prudentiel et de Résolution or ACPR) is stepping up the fight against money laundering and terrorism financing, said Francois Villeroy de Galhau, governor of the Bank of France. He made his comments at the launch of the ACPR's 2015annual report (available in French only), which the ACPR is part of.

"Our ongoing commitment to ensuring compliance with regulatory requirements is more than ever present in the work of the ACPR with regard to the fight against money laundering and terrorism financing. The financial centre, the banks and insurance companies, have mobilised, but it is an example of an area that is of major importance and every player has to keep in mind that the obligations and standards in this area can only grow," Villeroy de Galhau said in a speech (French, PDF). 

Market participants were strongly encouraged to file suspicious transaction reports with Tracfin (Traitement du Renseignement et Action Contre les Circuits Financiers Clandestin, which is the French FIU) as soon as any suspicion arises, the bank governor said.

At the same time, he said, the ACPR had taken steps to continuously monitor the situation, by analysing information obtained from questionnaires and on the spot checks, of which 22 were conducted in 2015 and several dozen in 2016. This included information obtained from the Panama Papers. 

"We do this in increasingly close cooperation with foreign supervisory authorities and we welcome of course everything that strengthens this cooperation," Villeroy de Galhau said.

Insurance companies are on the radar

Rémi Bouchez, president of the sanctions commission at the ACPR, said while his division usually dealt with sanctions resulting from breaches at banks and exchange offices, this year, the commission had also had to fine companies operating in the insurance sector. 

"The commission has handed down two decisions concerning the compliance with AML CTF obligations that target, for the first time, organisations operating in the insurance sector, namely the Mutuelle d'Ivry-La Fraternelle (a warning and 500,000 euros fine) et Generali Vie (blame and a 5 million euro fine)," Bouchez said in a speech (French, PDF) at the release of the report.

"Until now, sanctions imposed for these types of breaches were essentially aimed at banks and foreign exchange companies. With respect to these two cases, the commission has investigated numerous claims and felt that several requirements in this area have not been complied with. Included in particular were sanctions for breaches of these institutions' obligations with regard to reporting requirements. These two cases have also provided an opportunity for the commission to clarify or elaborate on certain rules that insurers should comply with. They can be interpreted as a signal to all organisations in the insurance sector that they must, like all organizations supervised by the ACPR, give full attention and use all means necessary to complying with the AML/CTF requirements," Bouchez said.

In its annual report, ACPR also highlighted that in the context of strengthening cooperation with Tracfin, particular attention had been paid to the insurance sector. It said survey results from 2014 had indicated that 62 percent of life insurance companies (as a percentage of market share) had systems in place that were broadly compliant with the regulations, but that 36 percent of firms had frameworks that could be improved, and in 2 percent of companies the framework was clearly insufficient. 

Bouchez also highlighted sanctions imposed on Ticket Surf International, an electronic money institution, for long-term failure to comply with the obligation to protect funds raised in return for the issuance of electronic money, which is one of the essential requirements of the regulation applicable to this type of institution, as well as for failings in its AML framework. 

In addition, two sanctions decisions were related to various alleged breaches with respect to subsidiaries and branch offices of foreign banks: Bank of Africa France (warning and 100,000 euros fine) and State Bank of India (blame and 300,000 euros fine, although this company has appealed the decision, which is before the Council of State).

A regulatory priority

That AML/CTF will be a regulatory priority for the ACPR was also highlighted in the annual report itself. In an interview in the report, Édouard Fernandez-Bollo, secretary general, also highlighted the fight against money laundering and terrorism financing as one of the five great priorities for the ACPR in 2016. 

"With respect to the fight against money laundering and terrorism financing, we will strengthen our efforts in the fight against terrorism financing and freezing of assets, both at the level of continuous monitoring through the use of new questions that were introduced in the annual survey in 2015, as well as at the level of on the spot checks with an increased target for visits that continue to focus in particular on the monitoring by the financial institutions of activities that were developed abroad," Fernandez-Bollo said. 

In addition to its focus on insurance companies, ACRP has also paid close attention to private banking and in particular the AML/CTF measures implemented by parent companies in their foreign offices, as well as money transfer providers which the ACPR also considered high risk. 

The ACPR's role in fighting money laundering and terrorism financing is focused on ensuring compliance with AML frameworks and due diligence obligations. It uses surveys and on-the-spot checks and is responsible for verifying compliance of all regulated entities with preventative measures.


  • Wietske Jarvis Blees is senior financial regulation correspondent Europe (ex-UK) for Regulatory Intelligence