On November 29, 2019 the French Financial Markets Authority (“AMF”, “Autorité des Marchés Financiers”) published the following four guidelines :
1. Anti-Money Laundering and Combatting the Financing of Terrorism (“AML-CFT”) – Guidelines on the risk-based approach regarding anti-money laundering and combating the financing of terrorism (Position – Recommendation DOC-2019-15)1
The AMF presents the risk-based approach to AML/CFT by describing the main risk factors to be considered (product risk, country risk and customer risk), the steps leading to their classification and related obligations.
These Guidelines strengthen and clarify the existing obligations under the French Monetary and Financial Code (“CMF”, “Code monétaire et financier”) and under the AMF’s General Regulation (Articles L. 561-4-1, L. 561-32 and L. 561-33 of the CMF and Articles 320-22 and 321-149 of the AMF’s General Regulation).
2. Ultimate Beneficial Owners (“UBOs”) – Guidelines on the vigilance obligations regarding clients and their ultimate beneficial owners (Position – Recommendation DOC-2019-16)1
The AMF specifies the due diligence obligations towards customers and their ultimate beneficial owners provided for in Articles L. 561-4-1 et seq. of the French Monetary and Financial Code, taking into account the contributions of the 4th AML Directive (“AML 4”), and in particular the strengthening of the risk-based approach, the distinction between the identification and verification of the identity of customers; precisions regarding the customers’ identity verification measures and the business relationship (the implementation of the risk-based approach, the moment when due diligence must be performed, the verification procedures by third-parties); the introduction of the notion of ultimate beneficial owner in last resort.
The AMF reinforces and clarifies through this publication the existing obligations under the CMF and the AMF’s General Regulation (Articles L. 561-10 2°, R. 561-18 and R. 561-20-2 of the CMF, and articles 321-147, 320-20, 325-22 and 325-62 of the AMF’s General Regulation).
3. Politically Exposed Persons (“PEPs”) – Guidelines on the notion of politically exposed persons (Position DOC-2019-17) 1
The AMF sets out the specific due diligence measures provided for by the regulations with respect to persons exposed to particular risks as a result of the jurisdictional or administrative political functions performed by them or their entourage. These guidelines are up to date with the provisions transposing AML 4 which extended the list of political, judicial or administrative functions relating to leaders of political parties and extended the scope of obligations to persons exercising such functions in France (national PEPs).
These guidelines strengthen and clarify the existing obligations under the CMF and the AMF’s General Regulation (Articles L. 561-2-2, L. 561-4-1 to L. 561-12; and Articles R. 561-1 to R. 561-22 of the CMF; and Articles 320-20, 321-147, 325-22 and 325-62 of the AMF’s General Regulation).
4. Declaration to the French AML Authority (“TRACFIN”) – Guidelines regarding the obligations of declaration to TRACFIN (Position DOC-2019-18) 1
The AMF specifies in its position the entire procedure for reporting to TRACFIN and recalls its complementary nature the customer due diligence requirements. The AMF also points out that the French reporting system is based on a case-by-case analysis, and is not automatic. These guidelines precise the scope of the obligation, set up the analysis process that drives to a declaration of suspicion and informs on these practical aspects.
These Guidelines strengthen and clarify the existing obligations from the CMF and from the AMF’s General Regulation (Articles L. 561-15, L. 561-32, R. 561-38 and D. 561-32-1 of the CMF and Articles 320-16, 320-19, 320-20, 321-143, 321-146, 321-147, 325-22, 325-62, 560-9, 560-10 and 560-11 of the AMF’s General Regulation).
These four Guidelines are applicable as of November 29, 2019.
We remind you that the AMF’s Guidelines are interpretations of laws and regulations that fall under the AMF’s jurisdiction. The AMF’s Guidelines call for conduct or compliance with provisions that the AMF considers likely to facilitate the implementation of the objectives of the general standards or principles within its jurisdiction.
Therefore, compliance with AMF’s Guidelines generally contributes to a presumption of regulatory compliance.