AML-CFT
Anti-Money-Laundering and Counter-Terrorist-Financing: a body of obligations requiring the intermediary to identify the client, understand the source of funds and report suspicious operations. Compliance, supervised by the ACPR and coordinated with the TRACFIN unit, is inseparable from IOBSP activity.
Key points
- Body of legal due-diligence obligations imposed on IOBSPs in the course of their activity.
- Requires identifying and verifying the identity of the client and beneficial owner.
- Atypical transactions must be reported to the TRACFIN financial intelligence unit.
- Non-compliance exposes the intermediary to administrative sanctions from the ACPR.
Frequently asked questions
What due-diligence measures must a broker apply when onboarding a client?
When onboarding, the broker must collect and verify a valid identity document, understand the purpose and nature of the business relationship, and consider the origin of the funds contributed to the transaction. For an SCI or company, the beneficial owner, the natural person(s) who ultimately control it, must be identified. These elements must be kept on file and updated if the client's situation changes.
What is a suspicious transaction report and when must you file one?
A suspicious transaction report is a disclosure to TRACFIN when the professional has reasonable grounds to believe an operation may be linked to money laundering or terrorist financing. The threshold is not certainty but a set of indicators: unexplained fund origin, inconsistency between the client's profile and the target property, unusual transactions. The report is confidential and the client must not be told about it.
How do you organise AML-CFT compliance in a brokerage firm?
A firm of significant size must appoint an AML-CFT officer, put written due-diligence procedures in place and train staff regularly. Internal controls must be documented and identity documents and supporting evidence retained for the legally required periods. For smaller firms, case-management software with built-in AML-CFT alerts can suffice, provided the principal trains themselves and can justify their approach in the event of an inspection.
In practice
A broker receives a file for a 400,000 € cash purchase, funded according to the borrower by personal savings. The absence of bank financing, combined with the client's inability to document the origin of the funds beyond a verbal statement, constitutes a sufficient set of indicators to consider a suspicious transaction report to TRACFIN, without informing the client.
Official sources
- Article L561-5 CMF (AML/CFT due-diligence) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)