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CA French Banking Law or Big Brother


robinwolf

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Every month I put cash into CA to pay my mortgage. I have been doing this for the last three years without a problem. Today I get a letter stating that to comply with French Banking Regulations I have to advise in writing:

The precise origin of the funds

The destination of the funds

Copies of supporting documentation, such as contracts of sale, invoices etc.  

Has anyone else had this snoopy letter, I am sure this would not be allowed in the UK

as it would breach privacy law.  [8o|][&]

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I am not surprised that they have asked you this if you are paying cash in. When I send money back to the UK every month I am obliged to state what these funds are for. Obviously my french  bank knows where and why the money is in the account.
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[quote user="robinwolf"]Every month I put cash into CA to pay my mortgage. I have been doing this for the last three years without a problem. Today I get a letter stating that to comply with French Banking Regulations I have to advise in writing:

The precise origin of the funds

The destination of the funds

Copies of supporting documentation, such as contracts of sale, invoices etc.
Has anyone else had this snoopy letter, I am sure this would not be allowed in the UK as it would breach privacy law. [/quote]

I had a similar letter many moons ago, when I opened a French bank acount with the proceeds of my house sale in the UK.

It's all to do with European law against money laundering and being able to trace funds.

For all they know, you could be someone taking bungs, a drugs baron or a mafioso laundering his money by paying a mortgage in cash.

[quote user="robinwolf"]I am sure this would not be allowed in the UK

as it would breach privacy law.[/quote]

I also had to provide that same info to my UK bank before they would transfer to same money to France.

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It's not just Europe.  We nearly had heart attacks last year. We'd sold our house in the U.S, arranged for the funds to be sent from what we call the Escrow company (NOT Escroc!!) and expected them to be wired to our French bank account.  Imagine our horror when the exchange firm, after months of telling us "no problem," said they couldn't possibly send the money out of the country as it didn't come from us, but a third party!!!  We had to PROVE that it was our money from selling our house and not from some nefarious activity.  All very upsetting.

PG

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It's not just the "money-laundering" side of the regs;to run an "overseas account(compte etrangere)",you must prove annually that your main source of income is "overseas";in my case a copy of a UK tax code.
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I work in a bank in the U>K and we are obliged to enquire  the origin of  any regular or iregular amounts of cash being paid in,if we feel uneasy about any transaction we have to report it through our manager to our fraud department who will then monitor transactions on an account,incidently they co-operate with the other banks in the uk,this has all come about since september 11th and the new guidelines the goverment have introduced on fighting money laundering, its quite amazing what drastic results this is bringing as it is making it harder for the criminals to get rid of cash, incidently I have reported to suspect drug dealers.Yes it is like big brother, but it is making our country safer and although it appears snoopy if you have a valid reason for paying in cash to your bank account there is no need to worry.I am suprised this is happening in France though but maybe they have intelligence from the uk that we are having results in the uk, incidently I can get prosecuted for not reporting anything unusual.Even car dealers in the u.k now have to do a report if anyone wants to pay in cash the a friend of mine the other day was told to pay with a bank draft because of this,so I assume they can be prosecuted as well under the new money laundering guidelines.
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All EU countries are signatories to the Hague Convention on drug trafficking which requires national legislation to be put in place to prevent money laundering.  In the UK, the money laundering regulations specify that all financial institutions must have procedures in place to detect the laundering of funds derived from drug trafficking or other serious crime.  As well as the banks, the regulations apply to any business dealing in large sums, eg estate agents, luxury goods retailers, motor dealers.  Solicitors are also covered.

The regulations include the identification of prospective clients at account opening, and the ongoing monitoring of accounts for suspicious transactions.  Any suspicions must be immediately referred to the bank's money laundering reporting office for assessment.  If there is no reasonable explanation, then the transaction is reported to the National Criminal Intelligence Service (NCIS).  This report is exempt from data protection and banker's confidentiality rules. Reports are collated by NCIS and referred to the appropriate law enforcement agency (national crime squad, fraud squad, customs and excise) for investigation.

In general, a cash payment should only be regarded as suspicious if it is unusual.  A £200,000 cash deposit which arrives unexpectantly would be reported.  A £200,000 payment received from a solicitor following the sale of property would not.  Clearly, a regular cash transfer to cover a french mortgage should not normally be queried.

However, what does happen in many cases, is that bank staff  tend to over refer.  This is because they are personally responsible in law if they fail to report their suspicions - up to 14 years imprisonment.

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Hello

What is the situation if you do not want a bank account, or perhap can't have one. If you sell something, say a car you are quite entitled to ask for cash after all it is your property. I have noticed quite a few places in France  that refuse to take cheques, so if you don't have a little plastic friend how do you pay?

Have a nice day

Jim

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Anyone who has been involved in property transactions in Spain, either as a buyer or seller, would not believe that these laws are Europe wide since it is quite normal for cash to make up 25-30% of the agreed price. And where is the biggest gateway for drugs entering the EU?.......yes, you guessed correctly.

Benjamin

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It's interesting that these laws were not being enforced with anything like the same degree of vigour in the run-up to the introduction of the Euro. The amount of Francs in cash being bandied about as le-monde-et-sa-femme 'laundered' their cash nest-eggs under the mattress had to be seen to be believed! I don't think any builder, car dealer, or furniture salesman saw a single cheque for about a year!

Whilst I can see the value and applaude the principle of monitoring large denomination transactions (it occured to me that those robbers in the UK were going to have a hard time of it disposing of all that cash when large cash transactions attract so much attention), the thing which makes me more than a little uneasy is the knowlege that this has more to do with the over-arching desire of 'uncle sam' to be able to monitor (non-US) money morement and considerably less to do with the EU.

A friend of mine has a large business buying and selling military vehicles (you want a dozen jeeps and a half-track for a movie? He's your man!) Because he deals all over Europe for many years he kept a Swiss account with no problems.  Things changed and there was not much activity in the Swiss account and so he closed it.  Sods Law immediately came into effect and the next deal which came along had to be done in Swiss Francs. The manager was happy to re-open the account again for him, but this time before the paperwork could be completed my friend was required to sign a form consenting to full disclosure of the account's details to the American financial authorities. This is a Swiss franc account, in a Swiss bank in the name of an EU citizen. Now tell me uncle sam doesn't have a finger in every pie and his nose in every cupboard.

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Jim,

interesting point about cash transactions but you may well not be aware that in France it is illegal to pay more than 3000€ in cash for anything.  Above that amount and you have to use a cheque, bank transfer, your flexible friend or whatever.  This I think has been around much longer than the money laundering rules and is to do with curbing the black economy.

 

 

 

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