New reports on transaction monitoring systems and risk analysis published by the ACPR and COLB

New reports on transaction monitoring systems and risk analysis published by the ACPR and COLB

Thu 28 Sep 2023

ACPR publishes report on automated AML/CFT transaction monitoring systems 

In 2022, the ACPR conducted a comprehensive thematic review, focussed on the automated systems utilised by the entities under its supervision. This entails entities implementing their obligations in terms of transaction monitoring. The primary objective of this review was to assess the efficiency of the operation and performance of tools that are used to monitor operations. 

The ACPR report emphasises five key themes 

Furthermore, the ACPR also illustrates some major learning outcomes derived from the recent report published. It discusses the widespread use of automated monitoring tools and variable resources devoted to them. Also, it highlights the systemic coverage of all transactions but lacks frequent consolidations between different accounts and products for the same customer. Additionally, it also discusses a minority of establishments being able to block suspicious flow using tools generating real-time alerts. It mentions how artificial intelligence is the future despite it being less prevalently used in recent times. Notably, the report also covers methods used to monitor tools performance, their settings and how they handle alerts. 

The ACPR intends to extend this exercise by drawing up guidelines on this subject in collaboration with Tracfin. Additionally, these guidelines will be discussed by the Consultative Committee on Money Laundering and Terrorist Financing prior to their adoption. 

COLB publishes report on the National Risk Analysis (NRA) 

The Conseil d’Orientation de la Lutte contre le Blanchiment des capitaux et de financement du terrorisme (COLB) has published a new version of the National Risk Analysis (NRA) on 14 February 2023. 

This recent update to the NRA report considers the latest recommendations of the Financial Action Task Force (FATF). This report is the result of two years of association and cooperation between various stakeholders such as regulated professionals, public sector entities and designated supervisory authorities working in the AML/CFT domain. 

The primary goal of this NRA, serving as a reference tool for the regulated professions, is to enhance comprehensive understanding and assimilation of risks and obligations associated with AML/CFT to effectively combat financial misconduct. 

The recent version of NRA includes a chapter dealing in depth with digital assets and Overseas France. Additionally, the update considers the integration of the sports agent profession as risky. Referring to the risk rating scale in accordance with the FATF methodology has also been revised from level three to four. 

The recent edition of the study identifies similar primary risks as in its September 2019 version. The risks associated with money laundering are tax evasion, social security and customs fraud, theft, and drug trafficking. Additionally, microfinancing through fundraising, operation of non-profit organisations and adoption of innovative financing methods are prominent risks associated with terror financing. 

The regulatory authorities have promptly acknowledged the update to the NRA. For instance, the Autorité des Marchés Financiers (AMF) has advised professionals under its supervision to consider this new version while evaluating their risk exposures.