What is money laundering (“blanchiment d’argent”) pursuant to French law?
Money laundering is an operation that consists of concealing the fraudulent origin of sums of money. A general incrimination was created by Law n° 96-392 of May 13, 1996 to comply with France's international commitments. The anti-money laundering mechanism was strengthened by Ordinance No. 2016-1635 of 1er December 2016 (JO 2 Dec. 2016).
When is money laundering committed in pursuant to French law?
Money laundering implies a material and a moral element.
On the one hand, money laundering involves three distinct phases:
- the introduction of illegal profits into the financial circuit;
- the concealment of the criminal source of the funds;
- the reintroduction of such criminal funds into legal economic activities.
Money laundering is therefore characterized by concealing the illicit source of funds and reintroducing them into the economy in a legal form.
Two behaviors are incriminated by the French Criminal Code:
- facilitating the misrepresentation of the origin of property or income, or
- assisting in the investment, concealment or conversion of the direct or indirect proceeds of a crime.
Money laundering is an intentional offence that requires knowledge of the fraudulent origin of the funds, although the proof of this knowledge may be indirect.
Professionals such as bankers, chartered accountants and lawyers are subject to vigilance obligations to prevent money laundering (Monetary and Financial Code, art. L. 561-1 et seq.)
How is money laundering punishable in France?
Money laundering is a criminal offence punishable by the French Criminal Code.
Individuals who commit or attempt to commit money laundering are liable to penalties of up to five years' imprisonment and a fine of €375,000.
However, if the money laundering is committed in a habitual manner, in an organized group or by using the facilities of a professional activity, the penalties are doubled.
In addition, the amount of the fine can be as high as half the value of the property acquired or the funds laundered.
Legal persons are also punished by a fine in accordance with article 131-38 of the French Criminal Code.
Individuals may also be subject to additional penalties, such as temporary or permanent disqualification from holding certain positions, suspension or cancellation of driving licenses, confiscation of property, etc.
Foreigners can be banned from entering the French territory for a maximum of ten years.
For certain offences such as tax fraud and corruption, a judicial public interest agreement may be proposed to a legal entity by the public prosecutor before public action is taken.
French law governing money laundering:
- French Criminal Code, art. 324-1 and following.
Main French court decisions on money laundering:
- Crim. March 6, 2019, n° 18-81.059
- Crim. March 27, 2013, n° 12-85.115