Cablegate: Terrorist Finance: Illicit Cash Couriers

VZCZCXRO8291
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHFR #4511 3201237
ZNR UUUUU ZZH
R 161237Z NOV 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 1145
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS PARIS 004511

SIPDIS

SIPDIS

STATE FOR EEB S/CT, INL AND EUR/WE
TREASURY FOR DO/IM

E.O. 12958: N/A
TAGS: EFIN ETTC KCRM KTFN PREL PTER FR
SUBJECT: TERRORIST FINANCE: ILLICIT CASH COURIERS

REFTEL: STATE 152088

1. SUMMARY: France has had measures in place and investigative
units dedicated to money laundering detection and prosecution since
1990. Cross-border movements of cash and other negotiable
instruments worth 10,000 euros or more must be declared to Customs.
In 2006, Customs seized 126 million euros in illicit trans-border
cash shipments. The government expects to implement the EC Third
Money Laundering Directive by the end of 2007.

2. Since 1st January 1990, French law has required that transfers by
individuals of money, securities or other financial instruments
either to or from a foreign country, be declared to the Customs
Authority, if they exceed a certain amount. Law 96-392 of May 13,
1996 extended the definition of money laundering to cover gains from
all criminal activities. The system currently in force stems from
the law of 9 March 2004, which adapted previous legislation to
changes in the criminal environment. EC Regulation No 1889/2005 of
October 26, 2005 instituted an obligatory declaration for cash
being brought into, or from, the EU.

3. Reporting Requirements: In order to achieve uniformity with the
rest of the EU, the GOF supplementary budget law for 2006 raised the
national threshold for declaration to 10,000 euros, applicable from
15 June 2007. Similar advance declarations provisions apply to
transfers via post and commercial couriers. Several categories of
institutions, including banks, are required to maintain records of
all transactions over 8,000 euros as well as safe deposit box usage
for a period of five years. The Third EC Money Laundering directive
is to be implemented in France by the end of 2007.

4. Penalties: Where no declaration, or a false declaration, of
transfer of capital is made, current legislation imposes sanctions,
ranging from an administrative fine up to confiscation, when there
is evidence of accompanying customs or other violations. Where a
money laundering offense has occurred, separate criminal penalties
of up two to ten years in prison plus a 750000 euro fine (under
Article 415 of the Customs Code) are also imposed.

5. Enforcement: The customs service is responsible for enforcement,
as codified in articles 464 and 465 of the Customs Code. With a
court order, Customs may hold cash instruments for three months,
with the possibility of renewal, while it undertakes an
investigation. Customs receives and files all declarations in a
centralized anti-fraud data base. This data base can be searched in
the context of customs or judicial investigations (on rogatory
commission) to discover whether offenders have transferred or
repatriated funds.

6. Results: In 2006, French Customs registered 1792 violations of
declaration requirements for movement of cash and negotiable
instruments (up 3.8 percent from 2005). Seizures totaled 126
million euros (up 4.9 percent from 2005). (Note: The seizure total
does not include cash movements determined to be otherwise
legitimate and therefore only subject to a fine.)

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