The French Financial Markets Authority ("AMF") has just carried out a complete overhaul of its doctrine on Anti-Money Laundering/Combating the Financing of Terrorism ("AML/CFT") and published its new guidelines setting out the obligations imposed on professionals subject to AML/CFT and placed under its supervision. The objective is to support them in the development and implementation of their AML/CFT preventive measures.
The AMF released a series of four new guidelines tackling topics that had never been addressed by the Authority, such as the risk-based approach, due diligence on funds' assets, due diligence with respect to clients, the outsourcing regime or the use of automated devices.
These guidelines are up to date with the national provisions transposing the fourth EU Directive on AML/CFT into national law. They do not take into account the work in progress to transpose the fifth Directive. They will be updated as soon as the texts are published.
1. Guidelines on the risk-based approach to AML/CFT
These guidelines present the risk-based approach to AML/CFT by describing the main risk factors to consider, the steps leading to their classification and the obligations attached. Specific developments are devoted to due diligence on the assets of collective investment undertakings.
2. Guidelines on due diligence obligations towards customers and their beneficial owners
They specify the due diligence obligations towards customers and their beneficial owners provided for in the French Monetary and Financial Code, taking into account the essential inputs from the fourth Directive. In particular, these guidelines address the strengthening of the risk-based approach, the distinction between the identification and the verification of the customers' identity; the new measures regarding identity verification; the introduction of the notion of "beneficial owner of last resort". Specific developments are also dedicated to the third-party introduction and to the outsourcing of AML/CFT obligations.
3. Guidelines on the notion of politically exposed person ("PEP")
These guidelines set out the specific due diligence measures to be carried out on persons exposed to particular risks because of the jurisdictional or administrative political functions they performed. These obligations extend to their relatives. These guidelines are up to date with the provisions transposing the fourth Directive, which extended the list of political, judicial or administrative functions concerned to leaders of political parties and extended the scope of the obligations to persons exercising such functions in France (national PEP).
4. Guidelines on the obligation to report to TRACFIN
This obligation is complementary to the customer due diligence obligations. The guidelines specify the scope of this obligation, outlines the analysis process that leads, where applicable, to a suspicious transaction report to Tracfin (the French financial intelligence unit), and provides information on these practical modalities.
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