AML/CTF legislation country profile
ECBA Questionnaire filled in for France
a) Legislation
1. Definition of money laundering in the local legal system.
Art. 324-1 Penal Code states:
(Act no. 96-392 of 13th May 1996 Article 1 Official Journal of 14th May 1996)
(Ordinance no. 2000-916 of 19 September 2000 Article 3 Official Journal of 22 September 2000 in force 1 January 2002)
- Money laundering is facilitating by any means the false justification of the origin of the property or income of the perpetrator of a felony or misdemeanour which has brought him a direct or indirect benefit.
- Money laundering also comprises assistance in investing, concealing or converting the direct or indirect products of a felony or misdemeanour.
2. Sanctions for money laundering offence.
Art. 324-1 Penal Code
(Act no. 96-392 of 13th May 1996 Article 1 Official Journal of 14th May 1996)
(Ordinance no. 2000-916 of 19 September 2000 Article 3 Official Journal of 22 September 2000 in force 1 January 2002)
- Money laundering is punished by five years imprisonment and a fine of €375,000.
And article 324-2 Penal Code
(Act no. 96-392 of 13th May 1996 Article 1 Official Journal of 14th May 1996)
(Ordinance no. 2000-916 of 19 September 2000 Article 3 Official Journal of 22 September 2000 in force 1 January 2002)
- Money laundering is punished by ten years' imprisonment and a fine of €750,000:
- 1.where it was committed habitually or by using the facilities offered by the exercise of a professional activity;
- 2.where it was committed by an organised gang.
Specific punishment in the case of drugs:
Article 222-38, §1 and §2 Penal Code
(Act no. 1992-1336 of 16 December 1992 Articles 354 and 373 Official Journal of 23 December 1992 into force 1 March 1994)
(Act no. 1996-392 of 13 May 1996 Article 2 Official Journal of 14 May 1996)
(Ordinance No. 2000-916 of 19 September 2000 Article 3 Official Journal of 22 September into force 1 January 2002)
- A penalty of ten years' imprisonment and a fine of €750,000 is incurred by the act of facilitating by any means the false justification of the origin of the assets or income of the perpetrator of one of the offences specified by articles 222-34 to 222-37, and by providing assistance for the investment, concealment or conversion of the fruits of one of these offences. The fine may be increased to half the value of the assets or funds involved in the money-laundering operation
- Where an offence concerns assets or funds proceeding from one of the offences specified in articles 222-34, 222-35 and 222-36, second paragraph, the perpetrator is liable to the penalties applicable to the offences of which he was aware.
3. (Legal) professions especially affected by local AML/CTF legislation.
There are actually several legal professions affected by this legislation, such as attorneys, notaries, court appointed administrators and others. The concerned professions are listed by an article of the French Monetary and financial Code, which is article L561-2, and it is precisely the point 12) that concerns the legal professions. But this list is obviously not limited to legal professions.
Article L561-2 Monetary and financial Code, CHAPTER II - Declaration of Sums or Transactions Suspected of Having an Illicit Origin
(Act No. 2001-420 of 15 May 2001 Art. 33 I Official Journal of 16 May 2001)
(Act No. 2003-706 of 1 August 2003 Art. 43 I, Art. 70 2 Official Journal of 2 August 2003)
(Act No. 2004-130 of 11 February 2004 Art. 70 I Official Journal of 12 February 2004)
(Order No. 2004-604 of 24 June 2004 Art. 52 XI Official Journal of 26 June 2004)
(Act No. 2004-804 of 9 August 2004 Art. 23 Official Journal of 11 August 2004)
(Act No. 2004-204 of 9 March 2004 Art. 33 VI Official Journal of 10 March 2004 effective 1 October 2004)
(Order No. 2005-429 of 6 May 2005 Art. 73 II Official Journal of 7 May 2005)
(Act No. 2006-64 of 23 January 2006 Art. 23 I Official Journal of 24 January 2006)
The provisions of the present chapter apply to:
1. Organisations, institutions and departments governed by the provisions of Part I of the present Book;
2. The Bank of France, the Issuing Institution of the Overseas Departments and the Overseas Issuing Institution;
3. The companies and departments referred to in Article L. 310-1 of the Insurance Code, and insurance and reinsurance brokers;
3 Bis The institutions or unions governed by Parts III and IV of Book IX of the Social Security Code or coming under II of Article L. 727-2 of the Rural Code;
4. Organisations that come within the scope of Article L. 111-1 of the Mutuality Code (1);
5. Investment firms, members of regulated financial instruments markets and the legal entities referred to in Articles L. 421-8 and L. 442-2, as well as the undertakings for collective investment in transferable securities referred to in 1 of I of Article L. 214-1, the management companies of undertakings for collective investment referred to in Article L. 543-1, the miscellaneous property intermediaries referred to in Part V of the present Book, the persons authorised to canvass referred to in Articles L. 341-3 and L. 341-4, and financial investment advisors.
6. Money changers;
7. Persons who execute, supervise, or recommend transactions relating to the acquisition, sale, transfer or letting of real property;
8. The legal representatives and managers responsible for casinos, groups, clubs and companies which organise games of chance, lotteries, betting and sporting or racing tips;
9. Persons who regularly engage in trading in, or organising the sale of, gems, precious materials, antiques and works of art;
10. Companies entitled to the exemption provided for in II of Article L. 511-7;
11. Accountants and auditors;
12. Notaries, bailiffs, receivers and court-appointed administrators, as well as advocates of the Conseil d'Etat and of the Court of Cassation, and counsel of the Courts of Appeal, as determined in Article L. 561-15-1;
13. Court-appointed auctioneers and valuers and companies effecting voluntary sales of furniture at public auctions;
14. The authorised intermediaries referred to in Article L. 211-4.
4. Specific regulations imposed upon attorneys at law.
The attorneys at law have two obligations:
- Firstly to verify the identity of their clients before working for them
- Secondly, to make a declaration stipulated in Article L 561-15 of the Monetary and Financial Code to the dean of their local bar association.
This report should be made in the circumstances specified by the article L 561-15-1 of the French Monetary and Financial Code.
Article L561-15-1 Monetary and Financial Code
(Act No. 2004-130 of 11 February 2004 Art. 70 II Official Journal of 12 February 2004)
(Act No. 2004-1343 of 9 December 2004 Art. 8 Official Journal of 10 December 2004)
(Order No. 2006-60 of 19 January 2006 Art. 6 IV Official Journal of 20 January 2006)
(Act No. 2006-64 of 23 January 2006 Art. 23 I Official Journal of 24 January 2006)
The persons referred to in 12 of Article L. 561-2 are required to make the declaration stipulated in Article L. 561-15 when, in the context of their professional activity, they execute for and on behalf of their customers any financial or real-property transaction or when they participate by assisting their customers with the preparation or execution of transactions relating to:
- The buying and selling of real property or business concerns;
- The management of funds, securities or other assets belonging to the customer;
- The opening of bank current accounts, savings accounts or securities accounts;
- Organisation of the contributions required to create companies;
- The formation, administration or management of companies;
- The formation, administration or management of foreign-law trusts or any similar structure.
The persons referred to in 12 of Article L. 561-2, when they are engaged in activities relating to the transactions referred to above, and accountants when they give legal advice pursuant to the provisions of Article 22 of order No. 45-2138 of 19 September 1945 which instituted the Order of Accountants and regulates the title and profession of the accountant, are not required to make the declaration stipulated in Article L. 561-15 when the information was received from one of their clients, or obtained on one of them, within the framework of a legal consultation, unless it took place for money-laundering purposes, or if such persons proceed therewith knowing that their client wished to obtain legal advice for money-laundering purposes, or when they provide their professional services in the interest of that client in connection with judicial proceedings, whether that information was received or obtained before, during or after those proceedings, including advice given in relation to the means of initiating or avoiding such proceedings.
Notwithstanding Article L. 561-15, advocates of the Conseil d'Etat and of the Court of Cassation, and legal counsel of the Courts of Appeal send their declarations, as applicable, to the president of the Order of Advocates of the Conseil d'Etat and of the Court of Cassation, to the president of the order which the advocate belongs to or to the president of the professional body which the counsel belongs to. Those authorities send the declarations sent to them by the advocate or the counsel to the department instituted by Article L. 561-23, unless they consider that the suspicion of money laundering is unfounded.
In which case, the president of the Order of Advocates of the Conseil d'Etat and of the Court of Cassation, or the president of the order which the advocate belongs to or the president of the professional body which the counsel belongs to informs the advocate or the counsel of the reasons why he believed he should not forward the information that he had sent to him. The president of the order or of the professional body who has received a declaration which he has not forwarded to the department instituted by Article L. 561-23 sends the information contained in that declaration to the president of the National Bar Chamber or to the president of the National Chamber of Legal Counsel. The information thus forwarded does not contain any references to the identity of the persons. Under the same conditions, the president of the Order of Advocates of the Conseil d'Etat and of the Court of Cassation, the president of the National Bar Chamber and the president of the National Chamber of Legal Counsel send a report to the Minister of Justice on the situations which did not give rise to communication of the declarations within a time limit set in a Conseil d'Etat decree.
The department instituted by Article L. 561-23 receives that same information from the Minister of Justice.
Article L561-23 Monetary and Financial code
(Act No. 2001-420 of 15 May 2001 Art. 40 I and II Official Journal of 16 May 2001)
(Act No. 2004-204 of 9 March 2004 Art. 33 VII 2, VIII Official Journal of 10 March 2004 effective 1 October 2004)
(Act No. 2006-64 of 23 January 2006 Art. 23 I Official Journal of 24 January 2006)
A department, placed under the authority of the Minister for the Economy, receives the declaration referred to in Article L. 561-15. That department is composed of public agents of the State who are specially empowered by the Minister, as determined in a Conseil d'Etat decree. The said department collects and assembles all the information needed to establish the origin of the sums or the nature of the transactions which have been the subject of a declaration referred to in Article L. 561-15, the special inspection provided for in Article L. 563-3 or an investigation referred to in Article L. 563-5. As soon as the information collected reveals facts likely to relate to drug trafficking or organised crime or the financing of terrorism, it refers the matter to the Public Prosecutor, informing him, if applicable, that it has also been submitted to the customs administration with a view to it carrying out investigations to seek and establish the offence referred to in Article 415 of the Customs Code.
The Public Prosecutor sends all final decisions handed down in cases which have been the subject of a declaration of suspicion pursuant to the present Part to the department referred to above.
b) Bar Association
1. Directives – formulated by the Bar Association – guiding the interpretation of the legislation and the force of these directives (binding, guideline,…).
There is a decision of the National Bar Association dated on July, 12th 2007, published in the Journal Officiel on August, 9th 2007, which is binding.
It contains the adoption of the regulations of the internal procedures intending to implement the obligations of prevention of money laundering and funding the terrorism and the mechanism of intern control intending to assure the respect of the procedures.
This document details the duties incumbent on attorneys at law and the way they should be accomplished regarding the existing legislation.
In particular it is important to notice that article 2 of the decision specifies that, at the exception of the statements of the article L561-15-1 of the Monetary and Financial code, the attorneys at law are not subjects to these regulations when they are providing a legal advice or when their actions forms part of a judicial procedure concerning one of the six activities listed in the 1st article of the decision.
2. Causes for discussion at the implementation stage of the European Directive in local legislation especially in relation to a possible conflict between this legislation and your professional code of ethics?
The National Bar Association and other associations (Conférence des Bâtonniers de France et d’Outre-mer, Ordre des Avocats au Conseil d’Etat et à la Cour de Cassation, Ordre des Avocats de Paris) introduced an action before the Conseil d’Etat for the excess of power demanding a partial annulment of the decree dated on June, 26th 2006 relating the prevention of money laundering and modifying some articles of the Monetary and Financial code, containing the implementation of the statute dated on February, 11th 2004 implementing the European Directive of December 4th 2001.
The reason for this action was due to an excessive infringement of the attorney’s professional secrecy duty he has in the context of legal advice and judicial procedures, and in violation of European rules.
On April 10th 2008 the Conseil d’Etat decided to annul partially this decree and to make professional secrecy prevail over the duties imposed to the attorneys by the European mechanism of preventing the money laundering.
3. Any action taken by the local Bar Association against the way in which the European directive was implemented in local legislation?
cfr. Supra
4. Other bodies that have undertaken any form of action to safeguard the rights of their members in this respect.
No.
c) Legal practice
1. Particularities that foreign attorneys at law in contact with the local legal system should be aware of / recommendations to be taken into consideration?
In case of doubt, contact a French attorney at law to advise you on the thin line that sometimes exists between acting within or outside the essential activities of the profession as an attorney at law.
d) Further information
Ministère de l’Intérieur’s
Conseil national des Barreaux’s
http://www.cnb.avocat.fr/
Websites mentioned above are only available in French.
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The ECBA maintains this website to provide and disseminate information on criminal procedure in the EU with regard to national money laundering legislation as it applies to attorneys at law. The content of the website relies on contacts in each jurisdiction and although our aim is to keep this information accurate, the ECBA does not warrant or assume any legal liability or responsibility for the accuracy, completeness, or reliability of the content. This information does not constitute legal advice. If errors are brought to our attention, we will try to correct them.
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Last Updated ( Tuesday, 18 January 2011 )
