Money Mover Country Report - France
Posted on the 3rd January 2017 by Emily Keates in Country Reports
In ancient times France was part of the Celtic territory of Gaul, becoming an independent country in the 9th Century. Since the 1600s, the country has played a major role in European and world events.
In the 20th century, it has experienced numerous crises, including the devastation of two world wars, political and social upheavals. It has, however, survived and today is the third-largest European nation with a population of just under 65 million.
The euro was introduced in France on 1 January 2002, after a transitional period of three years when the euro was the official currency but only existed as 'book money'. The dual circulation period – when both the French franc and the euro had legal tender status – ended on 17 February 2002.
Prior to that the French Franc has been the official currency since 1360, apart from a couple of breaks in the middle. The franc officially ceased to exist between 1641 and 1795, following its replacement by Louis XIII with the ecu and the Louis d'Or, but the name franc remained in common usage.
The French franc was reintroduced and became decimal in 1795, after the French revolution. As the value of the franc diminished over the centuries, it was replaced by the 'new' franc in 1960, with 100 old francs being worth one new Franc. The old franc became the valid 'centime' coin after the devaluation of the currency, and continued to be for some years.
Fifty years later, many older French still convert prices into 'old francs'. This is complicated for many travelers who expect to hear a price of, say, 25 euros, and get told the price is 20,000 francs!
France plays an influential global role as a permanent member of the United Nations Security Council, NATO, the G-8, the G-20, the EU and other multilateral organizations.
The government is a unique hybrid of presidential and parliamentary systems that reflect rich political traditions and culture. The nation declares itself to be an "indivisible, secular, democratic, and social Republic".
France is a unitary state. However, its administrative subdivisions—regions, departments and communes—have various legal functions, and the national government is prohibited from intruding into their normal operations.
Despite coming from his party's moderate win, Mr Hollande campaigned on strongly left-wing proposals, including a 75% top income tax rate, 60,000 new teachers, and the renegotiation of the European Union fiscal growth pact.
The country's colonial past is a major contributing factor in the presence of a diverse multicultural population. It is home to more than five million people of Arab and African descent.
France has suffered a number of extremist attacks in recent years, a fact which has contributed to the rising popularity of the far-right party Front National. Fears over uncontrolled immigration as a result of EU membership, general disillusionment towards the French establishment and the EU, and economic insecurity linked to France’s membership of the Eurozone also contribute to this popularity.
Trade and industry
France has the world's sixth-largest economy and is the second largest member of the Eurozone.
The chemical industry is a key sector for France, helping to develop other manufacturing activities and contributing to economic growth. France is the most visited destination in the world and so the tourism industry is also a major component of the economy.
France has been lagging behind the rest of the advanced economies since the financial crisis. A sluggish performance is evident from the statistics which show that since 2008, the French economy has grown by just 3%. In the same period, the German economy has grown by 6%, the UK 8% and the US about 10%.
In the third quarter of 2016 the French economy grew only by 2% (from the second quarter which had contracted by 0.1%) , having been weighed down by prolonged weakness in consumer spending, investment and a drag on tourism following the terrorism attacks.
AML & CTF (Anti-Money Laundering and Countering Terrorist Financing)
France is not on the FATF List of Countries that have been identified as having strategic AML deficiencies.
France has been removed from the regular follow-up process and agreed that it should now report on any further improvements to its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system on a biennial basis.
France was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).
Key Findings from the report are as follows: -
- Due to its sizeable economy, political stability, sophisticated financial system and commercial relations, especially with Francophone countries, France is a venue for money laundering.
- Public corruption, narcotics and human trafficking, smuggling, and other crimes associated with organized crime are sources of illicit proceeds.
- France can designate portions of its customs territory as free trade zones and free warehouses in return for employment commitments. The French Customs Service administers these zones.
- France has an informal economic sector, and underground remittance and value transfer systems such as hawala are used by immigrant populations accustomed to such systems in their home countries. There is little information on the scale of such activity.
- Casinos are regulated. The use of virtual money is growing in France through online gaming and social networks. Sport teams have become another significant source of money laundering.
- Bribery investigations from South Africa to France are ongoing, including bribery claims of Jacques Chirac, Dominique de Villepin and Jean-Marie Le Pen bribery claim from Gabon ex-president Omar Bongo. In September 2011 was judged Bernard Granie of 300 000 bribery from Provence Recyclage.
The Corruptions Perception Index 2015 ranks France 23 out of 168 countries and territories, with a score of 70 (0 being highly corrupt and 100 representing a very clean perception).
Corruption tends to not hinder business in France. The country's investment climate is favourable, and there is a strong legal framework to counter corruption. Corruption is perceived only to be a problem where business and politics overlap with public procurement the sector most affected. Cases involving illegal political funding have tainted the careers of several high-ranking French politicians. The Penal Code criminalises active and passive bribery and bribery of national and foreign officials, and gifts and facilitation payments are criminal offences. Demands for irregular payments are very unlikely to occur in France.
Money Mover view
We are happy to process Euro payments to France.
Our customers may wish to use our international payments for reasons including:
- The need to make Euro payments to suppliers based in France
- Or the need to make mortgage payments for a holiday home in France.
Other country reports you might be interested in:
- Money Mover Country Report - South Africa
- Money Mover Country Report - Spain
- The Challenges and Opportunities presented by Brexit
Get tips, articles, news and updates delivered to your inbox
The easy way to send secure international payments
Money Mover is the new, secure and low-cost way for individuals and businesses to make global payments in a range of currencies.
We’ve designed it from the ground up to take the hassle out of foreign exchange and international money transfer.Register for free