Sanctions and PEP Screening in France: A Practical Guide

A French bank reviews a new customer. An investment firm checks a company's owner. A business investigates a supplier before paying an invoice. Each may encounter sanctions exposure, but their AML obligations and PEP checks are not necessarily the same.

Start with the parties and the activity: which restrictions apply, whose identity needs checking, and what decision will the evidence support? In France, that means keeping asset-freezing controls, politically exposed person due diligence and suspicious-activity reporting connected without treating them as interchangeable.

Establish which French rules apply

The Code monétaire et financier (CMF), Article L.561-2, identifies the businesses subject to French AML/CFT obligations. Scope depends on the activity and statutory conditions, not simply on being a French company. Banks, investment businesses and relevant non-financial professions must check the requirements that apply to their own activities.¹

French asset-freezing duties have a broader reach. Article L.562-4 requires the persons within its scope to apply the relevant freezes and prohibitions without delay and inform the minister responsible for the economy immediately. Its scope includes individuals on French territory, whether French or foreign, and the specified legal persons and activities. A business outside the AML-regulated population cannot assume those restrictions are irrelevant.²

Keep law, supervisory guidance and company policy identifiable in the procedure. A risk assessment can shape customer due diligence. A low customer-risk rating cannot override an applicable freezing prohibition.

DG Trésor administers relevant sanctions implementation and notification procedures. ACPR and AMF supervise different financial-sector populations; their guidance must be read within that scope. TRACFIN is the financial intelligence unit receiving relevant suspicion reports. Informing one authority does not necessarily satisfy a duty to another.³⁴⁵⁶

Select the sanctions lists and PEP information

DG Trésor's Registre national des gels brings together national, EU and UN-related asset-freezing measures in force in France. Its search fields include names, aliases, birth details, nationality and regimes. Consult the designation and legal basis behind a candidate, rather than treating a similar name as the answer.⁷

The register does not resolve every sanctions question. Goods, services, destination, investment and other activity restrictions may matter even when neither party has a direct name match. The EU sanctions-list explanation provides broader context; the applicable legal act determines the restriction.

Check how relevant UN measures operate through French and EU arrangements. Assess US, UK and other foreign measures separately, including applicable jurisdiction, contractual requirements and lawful company policy. Do not assume every foreign designation is mandatory under French law, or substitute OFAC's ownership rule for an EU or French test.⁴

For PEP checks, use information that supports the French definition: the person's actual public function, dates and relevant family or associate relationship. A provider label is a starting point for classification, not a substitute for it.⁸

Map the parties and the events that require a check

A company-name search does not answer the questions concerning its owners, representatives or payment recipients. Connect each supplied party to its role and the reason for checking it.

This is a process-design table, not a statement that every French business has identical duties for every row. Apply the relevant customer and beneficial-owner rules, sector requirements and sanctions provisions.¹⁹⁴

Do not use an annual KYC refresh as a substitute for responding to new designations. The joint ACPR/DG Trésor guidelines contain detailed expectations for the financial organisations they address. Certain payment services have specific EU requirements; crypto-asset service providers within the AMF's remit must assess its applicable restrictive-measures position. Those rules should not be copied indiscriminately into every firm's screening schedule.⁴⁵

Investigate a candidate before deciding its consequences

A possible match needs prompt investigation. Compare the supplied identity with the full designation: names and aliases, dates and places of birth, addresses, nationality, identifiers, company registration details and relevant roles. Which fields help depends on what is available and lawful to process.

Record what supports identity, what contradicts it and what is missing. Avoid replacing absent identifiers with assumptions. A difference in one field may need explanation rather than automatic dismissal.

Investigate and escalate an unresolved candidate promptly, with appropriate controls on the affected activity. For the financial organisations addressed by the joint ACPR/DG Trésor guidelines, paragraph 167 describes the next step when necessary checks still cannot clear an alert: promptly send a déclaration d’homonymie to DG Trésor with the identification evidence and searches performed. If the authority cannot resolve the uncertainty, the organisation must decide how to proceed on the evidence available, inform DG Trésor of its decision and assess any separate TRACFIN reporting duty. This is not automatic permission to execute the transaction.⁴

An applicable freeze does not require prior authorisation or confirmation from DG Trésor. Do not wait for a routine review, or for perfect information, before implementing a measure that is already required.⁴

Separate the identity decision from the legal consequence. A confirmed identity leads to an assessment of the actual designation, assets, activity and applicable restrictions; it is not a generic instruction to freeze every connected company's assets.

Assess ownership and control separately

An unlisted company can still raise ownership or control concerns. Conversely, a director sharing a name with a listed person does not establish that the company is owned or controlled by that person.

Collect and assess the ownership path, relevant rights and supporting evidence under the applicable measure. An AML beneficial-ownership threshold is not automatically the sanctions test. The ownership and control explanation addresses why these concepts must remain separate.

The wider practical sanctions-screening guide explains how to connect candidate investigation, evidence and escalation.

Apply the French PEP definition to the actual person

French terminology is personnes politiquement exposées (PPE). CMF Article R.561-18 specifies qualifying prominent public functions and relevant family and close-associate categories. Apply it to the actual role and seniority: political connections, a public-sector job or a provider's label do not by themselves establish the classification.⁸

The provision covers qualifying functions currently exercised or ceased less than one year ago. It also defines the relevant family and associate relationships. Do not extend those categories to every distant relative, acquaintance or colleague. Leaving office is not proof that residual customer risk has disappeared; continued measures may follow from applicable due diligence and documented risk assessment.⁸

For a customer or beneficial owner within the relevant PEP provisions, R.561-20-2 addresses procedures for identification, approval to establish or maintain the relationship, investigation of the origin of wealth and funds, and reinforced ongoing vigilance. Approval belongs to an executive-body member or a person authorised by that body. Life-insurance and capitalisation beneficiaries have a separate route under R.561-20-3, including notification to an executive-body member or authorised person before payment or assignment and reinforced vigilance. Do not substitute the customer/owner approval workflow for that route.⁹

Keep four questions separate: is this the same person; does the role or relationship qualify; what measures are required; and what further controls does company policy justify?

A PEP finding does not establish wrongdoing, constitute a sanctions designation or automatically require refusing the customer. Screening also does not verify the explanation or documents concerning wealth and funds. The PEP screening guide explains the general concepts; its UK-specific requirements do not replace French rules.

Keep freezing notifications and suspicion reports separate

DG Trésor: assess the applicable freezing and notification requirements, legal source and relevant procedure. Article L.562-4 requires action without delay and immediate notification within its scope. DG Trésor provides procedures concerning freezing, homonymy and suspected circumvention. The appropriate route depends on the case; requesting clarification is not permission to delay required action.²³

TRACFIN: reporting professionals assess whether the conditions for a suspicion report are met. Its official instructions state that reporting generally precedes execution of the affected transaction. Specified exceptions permit reporting after execution, with notification then required without delay. Filing does not itself authorise execution: the conditions in L.561-24 must also be respected. ERMES is its secure reporting platform.⁶

A PEP finding alone does not establish a reportable suspicion. A sanctions case and a suspicion report may coexist, but neither notification automatically replaces the other. Management approval or a TRACFIN report cannot authorise a transaction prohibited under sanctions law.

Record external reports separately from internal case notes, respecting the confidentiality rules for declarations. Restrict access according to the information and applicable rules.¹⁰

Retain the evidence with the correct retention trigger

The case should let another analyst reconstruct the supplied identity, source information, investigation, uncertainty, approval and operational action.

Article L.561-12 sets different five-year clocks for the AML-obliged population, subject to stricter provisions. Relationship/customer and vigilance documents have the statutory closure or end-of-relationship trigger; transaction records run from execution within the provision's scope. This is not a universal five-year rule for every policy version, sanctions notification or internal alert.¹¹

Assign each category its applicable retention basis and access controls. Correct an inaccurate association when the evidence establishes a different identity. The GDPR screening guide covers the wider privacy questions.

Four practical scenarios

These examples are fictional and illustrate questions to resolve, not findings about real people.

A customer shares a listed person's name

Secondary identifiers are incomplete. The analyst checks the official record and available customer evidence, records the gaps and applies appropriate interim controls to the affected activity. The file states why the candidate was cleared, remained unresolved or required escalation; a name similarity alone does not establish identity.

A company's supplied owner may be a PEP

An investment firm confirms the owner's identity and qualifying public function, then applies the relevant French PEP measures. It records approval, the wealth/funds enquiries and the monitoring decision. The company is not automatically rejected because of the owner's status.

An existing customer becomes designated

The organisation identifies the affected identity, assets and activities and implements the applicable measures without delay. It records the designation's legal basis, action times and DG Trésor notification, then assesses any separate TRACFIN obligation. It does not wait for the next periodic customer review.

A supplier is unlisted but its control is unclear

The company-name search is clear, while supplied ownership information indicates possible control by a designated person. The analyst investigates the structure and relevant rights under the correct legal test. The name result cannot clear that separate issue.

Evaluate software against the work your team needs to do

Ask a provider to demonstrate common names, aliases, missing identifiers, changed designations and previously reviewed candidates. Check supported sources, update handling, provenance, review information and retrieval of earlier decisions.

Checklynx supports sanctions screening and PEP screening within one platform. Grouped, enriched profiles and available identifiers help analysts compare supplied identities with candidates and retain review context.

That context can help distinguish people and avoid reviewing duplicate source records separately. It does not guarantee identity, complete French coverage or a legal conclusion. The business remains responsible for relevant parties, ownership information, applicable rules, escalation, reporting and final decisions. Screening does not discover every undisclosed owner, verify documents or funds, or execute a freeze or regulatory filing on the firm's behalf.