Definition of LCB-FT :

The fight against money laundering and the financing of terrorism (hereafter LCB-FT) is a key component of "compliance ". It brings together a set of legal standards and obligations imposed on individuals and legal entities designated as "subject to compliance" by law. The aim is to effectively prevent and combat money laundering and terrorist financing offences.

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Money laundering and terrorist financing: What is money laundering?

Money laundering[1] consists of integrating funds derived from criminal activities into the legal circuit, in order to conceal their illicit origin.

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What is terrorist financing?

Terrorist financing[2] refers to any financial support given to a terrorist organization with the aim of facilitating its criminal activities.
Both types of behaviour are criminal offences punishable by severe penalties.

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Who is affected by compliance with the LCB-FT?

Due to the nature of their business, "taxable persons" are particularly exposed to the risks of money laundering and terrorist financing. The law therefore imposes obligations on them to detect, prevent and report such offences.

Example: Banking establishments handling large financial flows must comply with LCB-FT requirements. They may be confronted with attempts at money laundering or terrorist financing via their services.

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Why is LCB-FT essential?

LCB-FT occupies a central place in European and international public policy, particularly since the end of the 20ᵉ century. It has become crucial in the fight against phenomena such as drug trafficking and terrorism, which threaten the security and stability of societies.

According to the Treasury DepartmentLCB-FT has a dual objective:

• Deprive criminals of their financial resources to prevent illicit activities.
• Ensure the stability and integrity of the economic and financial system.[3]

Nathalie Goulet, an expert in terrorist financing, reminds us that: "Money is an essential element for any terrorist group, enabling it to finance military preparation, equipment, logistical supplies, and the promotion of its cause."[4]

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Joint treatment: money laundering and terrorist financing

Legislators have chosen to deal with money laundering and terrorist financing simultaneously because of their similarities.
According to the Committee of Experts on the Evaluation of AML/CFT Measures: "In both cases, the objective is to conceal the origin of the funds in order to make them invisible to the authorities."[5]

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Legal foundations of LCB-FT and sanctions

LCB-FT regulations are mainly based on European directives and regulations, transposed into French law, notably in Title VI of the Monetary and Financial Code. This legal framework includes over 200 articles dedicated to this issue.

In France, hundreds of thousands of companies in all sectors are subject to these obligations.

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Penalties for non-compliance with LCB-FT

Failure to comply with the LCB-FT exposes regulated companies to administrative sanctions (by authorities such as the ACPR, AMF or CNS) and, in some cases, to criminal prosecution before the criminal courts.

Example: In 2018, La Banque Postale was fined 50 million euros by the ACPR for breaches of its LCB-FT obligations. More recently, a significant proportion of the sanctions imposed by the ACPR in 2023 and 2024 relate to non-compliance with these requirements.

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Our LCB-FT support

Astrée Avocats offers tailor-made support to help companies comply with AML/CFT obligations and secure their activities in the face of these crucial challenges.
You can find out more about these services here.

[1] Article 324-1 of the French Penal Code - Punishable by 5 years imprisonment and 375k fine.

[2] Article 421-2-2 of the French Penal Code - Punishable by 10 years' imprisonment and a fine of 225,000 euros.

[3] Direction Générale du Trésor : Fight against money laundering

[4] Primer on Terrorist Financing Nathalie Goulet éditions Le Cherche-Midi 24/03/2022

[5] MONEYVAL: https://www.coe.int/fr/web/moneyval/implementation/financing-terrorism