France is considering an amendment to their constitution that would strip French citizenship to those who are accused of terrorism and possess duo-citizenship. There is a problem with this, of course, because anyone can be accused of terrorism. What happens if that person is not guilty?
And then there is the racism that is neatly disguised as counter-terrorism. Citizens of the European Union generally do not hold duo-citizenship because they have the economic freedom to do as their like across borders within the Union. That means, this law primarily targets non-Europeans in France. For this reason, Christiane Taubira, the French Minister of Justice (closest equivalent would be the American Attorney General of the Department of Justice), is stepping down. She is Afro-Latin born in French Guiana. She is at no risk of being accused of terrorism, of course, but it isn’t as though she can’t see right through this proposal.
As a financial compliance issue, this adds the terrible problem of figuring out how to treat such a person. Should this person hold a French bank account but is no longer a French subject, this person should be treated as a foreigner. Sounds simple but foreigners have limitations and other criteria attached to their French domestic accounts. Banks will have to scramble to recharacterize bank accounts. Operationally, the best way to do this would be to simply give the interested person a new account, but that puts the bank in jeopardy of losing the account altogether. This is an obvious cost to business that doesn’t seem necessary for a bank because… well, because the person isn’t a terrorist, or at least has not been found guilty of terrorism. Losing money that does not make the financial system and the nation any safer isn’t really a very good way to do business.
The only thing saving the French bank from losing that customer’s business would be that all banks in France would be subject to this. But because of the Union’s economic freedoms, the newly non-union citizen sill still be allowed to hold an account outside of France and even outside of the Union and still do normal daily business. The transition might be troublesome, of course, but that is no more troublesome than simply starting a new account. So, it isn’t much of a save for the French banking system.
Marcus Maltempo is a Certified Anti-Money Laundering Specialist and a Certified Fraud Examiner with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.