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Offences

Legal definition

How are ‘money laundering’, ‘terrorism financing’ and ‘fraud’ legally defined in your jurisdiction?

Article 324-1 of the Criminal Code defines ‘money laundering’ as:

  • facilitating by any means the false justification of the origin of property or income of the perpetrator of a felony or a misdemeanour that has brought that person a direct or indirect benefit; or
  • assisting by investing, concealing or converting the direct or indirect property obtained through felony or misdemeanour.

Article 421-2-2 of the Criminal Code defines ‘terrorism financing’ as the supplying, pooling or directing of funds, value or goods, or providing advice to that end, with the intention or understanding that they will be used (in full or in part) to commit one or more acts of terrorism.

Fraud does not constitute a separately defined offence under French criminal law. Rather, ‘fraudulent conduct’ is a material element of several criminal provisions under the Criminal Code (eg, swindling, breach of trust, extortion and falsification).

Nevertheless, Article 1741 of the General Tax Code defines ‘tax fraud’ as the fraudulent evasion or attempt to evade the levying or payment, in whole or in part, of taxes, either by wilfully failing to file a tax return within the prescribed timeframe, or by wilfully concealing part of the imposable sums, or by arranging for insolvency or hindering the collection of taxes by acting in any other fraudulent manner.

Principal and secondary offences

What are the principal and secondary offences in relation to money laundering, terrorism financing and fraud?

The principal money laundering offences are set out in Article 324-1 of the Criminal Code, which states that ‘money laundering’ consists of:

  • facilitating by any means the false justification of the origin of property or income of the perpetrator of a felony or a misdemeanour that has directly or indirectly benefited that person; or
  • assisting in investing, concealing or converting the direct or indirect property obtained through a felony or misdemeanour.

Article 421-2-2 of the Criminal Code defines ‘terrorism financing’ as the supplying, pooling or directing of funds, value or goods, or providing advice to that end, with the intention or understanding that they will be used (in full or in part) to commit one or more acts of terrorism.

Article 222-38 of the Criminal Code prohibits the laundering of the proceeds derived from drug trafficking, while Article 415 of the Customs Code prohibits the laundering of the proceeds derived from customs offences (eg, smuggling, importing or exporting without the proper customs declaration).

Article 1741 of the General Tax Code prohibits fraudulent evasion or attempts to evade the levying or payment, in whole or in part, of taxes, either by wilfully failing to file a tax return within the prescribed timeframe, or by wilfully concealing part of the sums subject to tax, or by arranging for insolvency or hindering the collection of taxes by acting in any other fraudulent manner.

In certain circumstances, the violation of anti-money laundering due diligence obligations set forth in the Monetary and Financial Code can also constitute a criminal offence. For example, disclosure to third parties of the existence and content of the report on suspicious activities sent to the Financial Investigation Unit of the Ministry for the Economy and Finance (Tracfin) is punishable with a fine of up to €22,500 (Article L 561-18 and L 574-1 of the Monetary and Financial Code).

The failure to comply with reporting obligations on suspicious activities to Tracfin does not constitute a separately defined offence under French criminal law. However, this conduct can fall within Article 434-1 of the Criminal Code, which punishes the failure to notify administrative or judicial authorities when a crime is committed, provided that it is still possible to prevent or limit its consequences. To engage the liability of institutions and persons subject to these reporting obligations, the authorities must give evidence that institutions and persons subject to these reporting obligations had actual knowledge that a crime (including money laundering) was being perpetrated.

Predicate offences

How are predicate offences defined?

The French government has adopted an all-crime approach to predicate offences in respect of anti-money laundering and terrorism financing legislation. Therefore, any misdemeanour or felony can constitute a predicate offence if the perpetrator of the predicate offence obtains a profit or receives an asset as a consequence of that offence (which is then used in money laundering).

To establish that money laundering has taken place, the authorities must identify and provide evidence of the predicate offence. In practice, this is often difficult, despite recent case law indicating a trend towards greater flexibility. In 2013 a presumption was introduced in the Criminal Code according to which goods and funds are presumed to be the direct or indirect product of a felony or misdemeanour when the material, judicial or financial conditions of the operation of placement, dissimulation or conversion could have no other justification than to conceal the origin or the effective beneficiary of the goods and revenues (Article 324-1-1-1 of the Criminal Code). Therefore, the burden of proof is reversed and the perpetrator must prove the legality of the funds or goods in question.

De minimis rules

What de minimis rules apply to money laundering, terrorism financing and fraud offences?

There is no de minimis rule which applies to money laundering and terrorism financing offences. 

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