What is the National Sanctions Commission ?
Establishment of an independent administrative authority
The National Sanctions Commission (CNS) is a independent authority created by the order of January 30, 2009, playing a central role in the regulatory and compliance landscape regulated by the provisions of articles L. 561-38 et suivants and R561-43 et suivants of the Monetary and Financial Code.
The CNS is established with the the Ministry of Economy ( Article L561-38 of the Monetary and Financial Code ) which may seize it, along with the Ministry of Economy, the Ministry of the Interior, the National Gaming Authority (ANJ), and the sporting federations, for breaches relating to the Fight against Money Laundering and Terrorist Financing (AML/CFT).
Failures which could potentially be sanctioned by the CNS are noted during inspections carried out by certain departments and affiliated entities to these entities :
- The CNIL, notably for the real estate brokers and others ;
- The Court of Cassation for gaming and betting sector ;
- L’ANJ pour les professionals of the gaming and online betting sector ;
- The DGDDI for the trade of antiques and works of art ;
- The sports federations for the sports agents .
Composition
Within the context of Article L. 561-39 of the Monetary and Financial Code, the CNS is composed of a member of the Conseil d’Etat , of a member of the Court of Cassation , of a judge of the Court of Accounts and of four qualified individuals in legal or economic matters . The President and members of the CNS are appointed for a five-year term renewable by decree.
Role and responsibilities of the CNS within the anti-money laundering and counter-terrorism financing framework
Scope of application
The CNS receives reports or procedures established following audits and is aware of breaches raised against certain parties persons subject to the obligations of LCB/FT as referred to in Article L. 561-2 of the Monetary and Financial Code, notably :
- The real estate intermediaries and professionals engaging in activities referred to in paragraphs 1, 2, 4, 5, and 8 of Article 1 of Law No. 70-9 of January 2, 1970, regulating the conditions of exercise of activities relating to certain operations relating to real estate and commercial businesses ;
- the activities of a professional practice are subject to the provisions of the Civil Code the registered office service which are mentioned in articles L. 123-11-2 to -6 of the Commercial Code ;
- The professionals of gaming and betting sector , including online. For example, casinos, gaming clubs, or online gaming and betting operators ;
- The individuals who negotiate artworks and antiques or who act as intermediaries, including art galleries ;
- The persons carrying out the activity of sports agents mentioned in Article L. 222-7 of the Code of Sport ;
- services en ligne, consentent à l’enregistrement de leurs données personnelles cash payments or electronic funds transfers of an amount exceeding a threshold set by decree and involving trade in certain goods : stones and precious metals, jewelry, household furnishings, interior decoration items, cosmetics, textiles, leather goods, food products, watches and tableware.
The scope of competence of the CNS is therefore particularly broad , covering a wide range of actors.
Power to impose sanctions by the National Commission for Sanctions
The CNIL has a wide range of administrative sanctions against those found liable who have failed to meet their obligations in the context of LCB/FT .
She may impose the following administrative sanctions :
- A warning ;
- A censure ;
- A a temporary ban on practice a ban on activity or the exercise of managerial responsibilities for a period not exceeding 5 years. These bans may be suspended ;
- The revocation of approval or professional card ;
- A monetary penalty of a maximum amount of 5 million euros.
Steps prior to bringing an action before the CNS :
- The DPA or any other competent authority carries out a assessment of a person , for example a real estate intermediary and raises deficiencies relating to the fight against money laundering and terrorist financing. Following the inspection, this service establishes a report of intervention which it submits to the Ministry of Economy, of which it is part.
- In accordance with articles L. 561-38 and R. 561-47 of the Monetary and Financial Code, the The Ministry of Economy is competent to refer matters to the CNS and transmit them to the CNS, along with any related documents. These elements contain any breaches identified during inspections carried out by the DDPP.
- La CNS statues by reasoned decision and shall not impose any sanctions unless the real estate intermediary – or the concerned professional – or their representative has been informed or, failing that, duly notified.
- A compulsory jurisdiction may be brought by the concerned professional against a decision of the CNS.
The impact of sanctions on the concerned companies
The sanctions imposed by the CNSS may have significant repercussions for the concerned companies. In addition to financial and disciplinary sanctions, the consequences may be :
- A loss of confidence of business partners of the company sanctioned : a sanction may harm the reputation of a company, particularly when it affects its advertising, making it more difficult to collaborate with partners / clients.
- An obligation of compliance : The sanctioned entities must review their internal procedures, which may result in additional costs for audits, consulting, training, etc.
The obligations of companies regarding LCB/FT
The fight against money laundering and terrorist financing imposes on companies a series of detailed obligations under articles L. 561-4-1 and following of the Monetary and Financial Code. These obligations include, notably :
- The implementation of internal mechanisms of control : Companies must formalize anti-fraud and anti-money laundering policies, including specific tools such as customer identification, risk mapping, etc.
- The Suspicious Transaction Report (STR) : Pursuant to Article L. 561-15 of the Monetary and Financial Code, any subject entity must report to TRACFIN any suspicious transaction that may be linked to a breach of regulations.
- The training of employees : Companies must raise awareness among their staff regarding the risks related to money laundering and terrorist financing, and train them to detect suspicious behaviors.
These obligations aim to prevent infringements while strengthening the security of transactions subject to this regulation.
Collaboration with other institutions and authorities
The CNSS cooperates with various institutions to strengthen the effectiveness of the LCB/FT framework. Among the main partners of the National Sanctions Commission are :
- TRACFIN : responsible for collecting and analyzing suspicious financial information, TRACFIN transmits relevant files to the competent judicial or administrative authorities.
- The ACPR sanctions committee : specialized in the offenses of banks and financial institutions, it complements the action of the CNS.
- The judicial authorities : In cases of serious breaches, the CNS may transmit information to the prosecutor’s office.
What are the limits of the powers of the CNS ?
Despite the scope of its powers, the CNS is subject to certain limitations, ensuring a balance in the exercise of its duties :
- Lack of investigative authority : The CNSS does not itself conduct audits. It only rules on the reports submitted by the competent bodies: DGCCRF, ANJ, etc.
- Respect of the rights of the defense : Any person subject to a procedure before the CNS has the right to be heard or represented before any decision is made.
- Possible remedies : The decisions of the CNS are subject to appeal before administrative courts.
To note :
- The jurisdiction of the CNS is particularly broad and covers the activities of numerous professionals subject to the obligations of LCB/FT.
- The penalties may extend to a prohibition on practice.
- The measures to combat money laundering and terrorist financing must be formalized and give rise to specific internal control tools.
