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French finance ministry warns against money laundering through castle purchases

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The French Ministry of Finance published a report on money laundering and drew particular attention to the risks of buying vineyards abroad.

Château La Commanderie in Pomerol sold to a couple from Hong Kong in May 2013

The annual report, entitled Processing of Intelligence and Action Against Clandestine Financial Circuits, or Tracfin, is the result of a working group within the Ministry of Finance created in 1990 during the G7 summit, and underlines that a significant number of suspicious or risky activities have been reported in the wine real estate sector in 2012.

Led by the director Jean-Baptiste Carpentier, Tracfin’s mission is to collect information on all suspicious transaction reports linked to possible money laundering or tax evasion. The report specifically points out that transactions of vineyards with links to Russian, Chinese and Ukrainian buyers have raised questions.

“Complex legal structures are created, often with shell companies based in tax-advantaged countries,” he notes, “which make it difficult to establish the identity of the end buyer and the origin of the funds. used for the purchase ”.

The investigation also revealed that French holding companies can be created, all of the shareholders and head office of which are based in tax-advantaged countries outside of France.

The report comes as China raised the issue of money laundering at the “national strategic level,” according to People’s Bank of China vice-governor Li Dongrong in May 2013.

The Chinese economy lost $ 3.7 trillion in illicit capital outflows between 2000 and 2011, the Washington-based research group Global Financial Integrity said last year.

The French economy is also sensitive to the loss of money due to non-payment of taxes and other public finance measures, as it continues to struggle with the current recession – although some observers note that the need for funds within local economies means fewer questions are asked of buyers.

Written by Jane Anson


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