June 24, 2019

Breaking news

In what it presents as a set of guidelines designed by a risk-driven approach, the FATF published on 21 June 2019 recommendating to fight the use of crypto-assets and cryptocurrency platforms for launderind money and financing terrorism.

This fight against money laundering is (with the fight against corruption) often presented as the core of the Compliance Law. The FATF takes a large part of it. Even if this new branch of Law aims to crystallize other ambitions, such as the fight against tax fraud or climate change, or even the promotion of diversity or education and the preservation of democratie, the legislation of Compliance Law are mature in the matter of money laundering and the terrorism financing, as they are in the fight against corruption.

The news comes then not from the new legal mechanisms but rather from the new technological tools that could allow the realization of the behaviors against which these obligations of compliance have been inserted in the legal system. It is then to these technologies that the law must adapt. This is the case with crypto-assets and cryptocurrency platforms. Because these are rapidly evolving technologies, with the exercise of written guidelines in 2019 to inform the meaning of the provisions adopted in 2018, the FATF is taking the opportunity to change the definition it provides of crypto-assets and cryptocurrencies. So that a too narrow definition by the texts does not allow the operators to escape the supervision (phenomenon of "hole in the racket" - loophole)..  




In fact, in October 2018, the FATC (Financial Action Task Force) developed 15 principles applying to these platforms, to allow this intergovernmental organization to carry out its general mission to combat money laundering and the financing of terrorism. These June 2019 recommendations are to interpret them.


In this very important document, where it is expressly stated that it is a matter of fixing the obligations of those who propose crypto-assets and crypto-currencies, the notion of self-regulation is rejected. Il est writter : "Regarding VASP (virtual assets services providers) supervision, the Guidance makes clear that only competent authorities can act as VASP supervisory or monitoring bodies!footnote-119, and not self-regulatory bodies. They should conduct risk-based supervision or monitoring, with adequate powers, including the power to conduct inspections, compel the production of information and impose sanctions. There is a specific focus on the importance of international co-operation between supervisors, given the cross-border nature of VASPs’ activities and provision of services."

On the contrary, it is a matter of elaborating the control obligations that these service providers must exercise over products and their customers (Due Diligences), which must be supervised by public authorities. 

In order to exercise this supervision and monitoring, the national authorities themselves must ensure that they work together : "As the Virtual Assets Services Providers (VASP) sector evolves, countries should consider examining the relationship between AML/CF (Anti-Money Laundering and Counter Terrorist Financint) measures for covered VA activities and other regulatory and supervisory measures (e.g., consumer protection, prudential safety and soundness, network IT security, tax, etc.), as the measures taken in other fields may affect the ML/TF risks. In this regard, countries should consider undertaking short- and longer-term policy work to develop comprehensive regulatory and supervisory frameworks for covered VA activities and VASPs (as well as other obliged entities operating in the VA space) as widespread adoption of VAs continues".

After particularly interesting comparative law information on Italy, the Scandinavian countries and the United States, the report concludes: "International Co-operation is Key", because of the global nature of this activity.


Since the issue is not the global Regulation of these platforms and types of products, but only the possible modes of money laundering and terrorist financing to which they may give rise, the FATF recalls that neither crypto-products nor product suppliers are not referred to as such. As the guidance's title recalls, common to the 2018 document adopting the 15 principles and this interpretive document, these are "risk-based" rules. Thus, it is according to the situations that these - products and suppliers - that they may or may not present risks of laundering and financing of terrorism: depending on the type of transaction, the type of client, the type of country, etc. For example, from the moment that the transaction is anonymous, that is impossible to know the "beneficiary", or that it is transnational and instantaneous, which makes it difficult to supervise because of the heterogeneity of national supervisions little articulated between them.

In reports that public supervisors must have with crypto-product suppliers, they must adjust according to the level of risk presented by them, higher or lower: "Adjusting the type of AML/CFT supervision or monitoring: supervisors should employ both offsite and onsite access to all relevant risk and compliance information.However, to the extent permitted by their regime, supervisors can determine the correct mix of offsite and onsite supervision or monitoring of Virtual Assets Services Providers (VASPs). Offsite supervision alone may not be appropriate in higher risk situations. However, where supervisory findings in previous examinations (either offsite or onsite) suggest a low risk for ML/TF, resources can be allocated to focus on higher risk VASPs. In that case, lower risk VASPs could be supervised offsite, for example through transaction analysis and questionnaires".

This "adjustment" required does not prevent a very broad conception of the power of supervision. So, for nothing escapes the recommendations (and in particular the obligations that ensue for the suppliers of these products), the definition of the crypo-assets and crypo-currencies is this one: “Virtual asset” as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities, and other financial assets that are already covered elsewhere in the FATF Recommendations."

And for the same reason of effectiveness is posited the principle of technological neutrality: "Whether a natural or legal person engaged in Virtual Assets (VA) activities is a Virtual Asset Services Provider (VASP) depends on how the person uses the VA and for whose benefit. As emphasized above, ...  then they are a VASP, regardless of what technology they use to conduct the covered VA activities. Moreover, they are a VASP, whether they use a decentralized or centralized platform, smart contract, or some other mechanism.".

The interpretative guidelines then formulate the obligations that these platforms have with regard to the supervisors they obey(question of the "jurisdiction", ratione loci ; ratione materiae): " The Guidance explains how these obligations should be fulfilled in a VA context and provides clarifications regarding the specific requirements applicable regarding the USD/EUR 1 000 threshold for virtual assets occasional transactions, above which VASPs must conduct customer due diligence (Recommendation 10); and the obligation to obtain, hold, and transmit required originator and beneficiary information, immediately and securely, when conducting VA transfers (Recommendation 16). As the guidance makes clear, relevant authorities should co-ordinate to ensure this can be done in a way that is compatible with national data protection and privacy rules. ".

These platforms are not uniformly defined due to the diversity of their activities. Because it is their activity that makes them responsible for this or that regulator. For example from the Central Bank or the Financial Regulator: "For example, a number of online platforms that provide a mechanism for trading assets, including VAs offered and sold in ICOs, may meet the definition of an exchange and/or a security-related entity dealing in VAs that are “securities” under various jurisdictions’ national legal frameworks. Other jurisdictions may have a different approach which may include payment tokens. The relevant competent authorities in jurisdictions should therefore strive to apply a functional approach that takes into account the relevant facts and circumstances of the platform, assets, and activity involved, among other factors, in determining whether the entity meets the definition of an “exchange”!footnote-121 or other obliged entity (such as a securities-related entity) under their national legal framework and whether an entity falls within a particular definition. In reaching a determination, countries and competent authorities should consider the activities and functions that the entity in question performs, regardless of the technology associated with the activity or used by the entity".



Reading this very important document, it is possible to make 6 observations: 

1. Interpretative documents are often more important than rules interpretated themselves. En these guidances, first and foremost, these are major obligations that are stated, not only for platforms but also for national laws, and well beyond the issue of money laundering. So, it is laid: "Countries should designate one or more authorities that have responsibility for licensing and/or registering VASPs. ...  at a minimum, VASPs should be required to be licensed or registered in the jurisdiction(s) where they are created. ".This is a general prescription, involving a general regulation of these platform, which registered in a general way, will probably be supervised in a general way.

Secondly, it is a series of binding measures that is required of the National legal systems, for example the possibility of seizing crypto-values.

It shows that the soft Law illustrates the continuum of the texts, and allows their evolution. Here the evolution of the definition of the object itself: the definition of crypto-assets and crypto-currencies is widened, so that the techniques of money laundering and terrorist financing are always countered, without it being necessary to adopt new binding rules. We are beyond mere interpretation. And even more of the principle of restrictive interpretation, classically attached to the Repressive Law ...

2. Fort the effectiveness of the Compliance Law, definition become extremely broad. Thus, to follow the FATF, the definititon off a financial institution is as follows: "“Financial institution” as any natural or legal person who conducts as a business one or more of several specified activities or operations for or on behalf of a customer". This is more the definition of a company in Competition Law!footnote-120....Why ? Because otherwise, an operator finds a status allowing him to escape the category and obligations listed. The principle of efficiency implies it. The principle of "legality", derived from criminal law, has hardly any existence. But this also corresponds to the general evolution of the financial world, in which one no longer stars from the organ (for example to be a"bank") but of activity, but from an activity or a fonction whose metamorphoses are so rapid that it is almost impossible to define them ....

3. In the same way, the definition of crypto-assets or crypto-currencies: "“Virtual asset” as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities, and other financial assets that are already covered elsewhere in the FATF Recommendations". This definition is purely operational because nothing can escape the FATF: all that is financial or monetary, whatever its form or support, its traditional form or a form that will be invented tomorrow, is within its competence and, through a such definition, is under national supervisors. In Compliance Law, and since everything is based on risk analysis, the idea is simple: nothing must escape obligations and supervision.

4. Platform apprehension is done by the criterion of activity, according to the "functional" method. Thus, its supervision, or even its regulation, and its obligations of compliance, will apply, depending on what it does, to the Financial Regulator (if it does ICO) or to others if it only uses tokens as an instrument of exchange. If it makes several uses, then it would fall under several Regulators (criterion ratione materiae).

5. The principle of "technological neutrality" is a classic principle in Telecommunications Law. Here we measure the interference between the principles of Telecommunications Law and Financial Law, which is logical because crypto-financial objects are born of digital technology. This neutrality allows both technological innovation to develop and supervision to be unhindered for not having foreseen an innovative technology appearing after the adoption of the legal text. Here again, the effectiveness of Compliance and risk management are served, without the innovation being thwarted, which is often opposed.

6. What is expected of national public authorities is a very wide "interregulation". This is both "positive". Indeed, this includes financial matters but also the security of networks, or the protection of consumers. It can be called equilibrium interregulation in that all goals converge. But this is also an "interregulation" that can be described as balance. Indeed, the FATF is concerned about the protection of personal data. However, it emphasizes that the effectiveness of the Compliance system must stop. But the protection of personal data is also a part of Compliance Law.... This is one of the major challenges in the future: the balance between security and the fight against global evils(here the fight against money laundering and terrorism) and the protection of the privacy of individuals, as both fall under Compliance, but both have opposite legal effects: one the transmission of information, and the other the secret of the information. 




June 6, 2018

Breaking news

Jan. 15, 2016

Compliance and Regulation Law Glossary

Feb. 23, 2015

Breaking news

The theme of the relationship between regulation and innovation finds every day new illustrations. The example of the drone is particularly noteworthy.

Indeed, the drone is a technical object that moves in the air without being driven in an immediate way by the hand of man.

The legal mechanism of qualification brought the drone in the category of "aircraft" and submit it to the regulatory power of the civil aviation regulator.

The regulation of civil aviation is primarily a safety regulation, not a regulation of the sector's economic deployment.

This is why regulators have taken restrictive positions on drones used for commercial purposes, to the extent that the presence of human beings, most the pilots, are the condition for the safety of people. The fact that the drones fly with "no one" led to consider as a danger a prior, which led regulators to take restrictive measures on flying drones for commercial purposes, restricton consistent with the regulator's intervention criteria, without taking into account external rules, such as the protection of privacy.

But whatever the sector, regulators see themselves increasingly as economic regulators. If we adopt this perspective, a restrictive approach appears to be nonsense.

In the interests of balance in both approaches, the safety of people and the economic development through innovation, the US civil aviation regulator, the Federal Aviation Administration is developing new rules.

February 11, 2015, Federal Aviation Administration raised the need for a legal framework for commercial drones. The reason for this is economic. As it writes: "It is anticipated that this activity will result in significant economic benefits" Indeed, Article 333 of the 2012 ACT of modernization and reform  imposes registration procedure for every commercial unmanned flying object in the sky!footnote-28. But this hinders business development, and therefore the incentive to technical innovation drone.

It was necessary to find a balance between security of persons and lifting of barriers to economic development. This is why the FAA will distinguish between "small" and other drones. The former are particularly useful in agriculture. To the extent that the former do not constitute danger to persons, an exemption from this procedure (Article 333 exemption) may be given concerning them.

One can analyze this evolution of air Regulation in two ways. First, it is for air regulator to take into account fundamental innovation of flying machines with "no one": innovation will be the base of a huge market for which strict regulatory rules could have been the troublemaker. The consideration of the safety of people remains since only drones "small" are allowed. In addition, they will have to remain at low level and away from airports and housing.

Second, the Regulator reacts by pragmatism. The ban on commercial flight drones hasn't prevented investment in this area. So far, the regulator had instead chosen not to react to the open violations of the standards, from the moment that the safety of the people wasn't in danger. The idea of the new conception is to promote this new market by putting the rules protecting the physical safety of people.

Dec. 2, 2014

Breaking news

Internet requires regulation. It does not works solely because of the moral sense of the users or through vigilance of companies that develop on it.

The regulator of the virtual space can be imagined, or a regulator of the various possible activities that develop there, regulators then deploying their powers as when the activity takes place on the Internet. Thus, it is the case of advertising.

In the UK, the Advertising Standard Authority (ASA) monitors the advertising business, also on the Internet.

Its decision of 26 November 2014 is remarkable for several reasons. It punishes two non-professionals, namely two users Youtube tool. But in communication, non-market entrepreneurs sometimes have more weight than businesses. But on the Internet, users can sponsor their free activity, which is to monetize. In this case, the two had played on their Youtube channel short films that were advertisements.

The complaint made against them is that Youtube is not a support on which those who put content make it to commercial purposes. And other users could not understand they watched the advertisement and not a distraction film or information.

The Regulator imposes a sanction against Internet users not because they did a promotional contract with the company, in this case Cadbury wich  wants to promote Oreo cookies. By this contract, the entreprisee via the famous Internet users can reach consumers, which is permissible. They are punished because they have deceived the confidence of the other Internet users who can't imagine being the target of an advertisement. The fact that it is people with many fans on youtube counted in the severity of the Regulator. Indeed, they have more than 2 million subscribers. More than 1.3 million have seen the offending video. Only 243 people have not loved it.

Thus, in a virtual world always close to self-regulation, the notion of trust made to the information transmitters is the central concept of the system served by the Regulator power to impose sanctions,The author of the message is a professional or not is irrelevant. What matters is the importance that others give the message he sends.

Oct. 22, 2014

Thesaurus : 02. European Union

Updated: Dec. 4, 2011 (Initial publication: Dec. 4, 2011)

Thesaurus : Doctrine

Paris, Larcier, 2010, 279 p.

Updated: Jan. 21, 2011 (Initial publication: Jan. 19, 2011)

Sectorial Analysis


The American Supreme Court accepted on November 29th, 2010, to hear Microsoft’s claims in an appeal of a decision of the U.S. Court of Appeals of the Federal Circuit in Washington of December 12th, 2009, arguing that the burden of proof is too high for companies accused of infringement and whose defense is that the patent is not valid.


Fiche thématique (Innovation) : L’organisation de la charge de la preuve dans les cas de propriété intellectuelle actuellement en instance devant la Cour Suprême américaine.

La Cour Suprême américaine a accepté le 29 novembre 2010 de recevoir la plainte de Microsoft en appel d’une décision de la Cour américaine d’appel du circuit fédéral de Washington du 12 Décembre 2009. Selon Microsoft, le standard de preuve pour une entreprise accuse de contrefaçon soutenant que le brevet violé n’est pas valide est trop élevée.


Thematischer Bericht (Innovation): Die Zuteilung des Beweislasts in Patentverletzungsfälle steht vor dem amerikanischen Obergericht.

Das Amerikanische Obergericht hat am 29. November 2010 Microsofts Klage in einer Anfechtung einer Entscheidung des amerikanischen Bundesberufungsgerichtes in Washington vom 12. Dezember 2009 angenommen. Microsoft behauptet, dass der Beweislast für Unternehmen, die wegen Patentverletzung angeklagt wurden, und die die Ungültigkeit des Patents beweisen wollen, zu schwer ist.



Informe Temático (Innovación): La organización de la carga de la prueba de casos de propiedad intelectual actualmente pendientes ante la Corte Suprema de los EEUU
La Corte Suprema de los EEU aceptó el 22 de noviembre del 2010 escuchar reclamos de Microsoft en una apelación de la decisión de la Corte americana de Apelaciones del Circuito Federal en la capital de Washington el 12 de diciembre del 2009, argumentando que la carga de prueba era demasiada alta para compañías acusadas de violación y cuyas defensa es que el patente es inválido.


Relazione tematica (Innovazione): L’onere della prova in material di proprietà intellettuale dinanzi alla Corte suprema degli Stati Uniti
Il 9 novembre 2010, la Corte suprema degli Stati Uniti d’America ha accettato di pronunciarsi su una decisione della Corte d’appello federale di Washington resa il 12 novembre 2009 contro Microsoft. Quest’ultima sostiene che l’onere della prova che spetta alle compagnie accusate di violazione dei diritti in materia di proprietà intellettuale é eccessivo nel caso in cui il convenuto tenti di dimostrare che il brevetto non sia valido.


Informe Temático (Inovação): A distribuição do ônus da prova nos casos de propriedade intelectual atualmente pendentes perante a Corte Suprema nos Estados Unidos da América
A Corte Suprema dos Estados Unidos da América decidiu, no dia 22 de novembro de 2010, conhecer das alegações de Microsoft no recurso contra a decisão do Tribunal americano de Apelação do Distrito federal de Washington de 12 de dezembro de 2009. Em seu recurso, Microsoft alega que seria muito elevado o ônus da prova para companhias que, acusadas de contrabando, argumentam que a patente violada não seria válida.








Updated: Dec. 15, 2010 (Initial publication: Dec. 15, 2010)

Sectorial Analysis


In an amicus curiae brief of October 29, 2010, in the Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al. case, before the Court of Appeal for the Federal Circuit, the US Department of Justice reversed a longstanding policy by declaring isolated human genes ineligible for patents, because they are part of nature. This new position could have an enormous impact on the medical and biotech industries.

Fiche thématique (Innovation, Santé): le Ministère de la Justice américain se déclare opposé à la brevetabilité du génome humain isolé.
Dans une lettre d'amicus curiae datée du 29 octobre 2010, dans le cas Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al, porté devant la Cour d'appel du circuit fédéral, le Département de la Justice américain renverse sa précédente politique en déclarant les gènes humains isolés non brevetables parce qu'ils font partie de la nature. Cette nouvelle position pourrait avoir un impact très important pour les industries médicales et biotechnologiques.
Thematischer Bericht (Innovation, Gesundheit): das amerikanische Justizministerium hat sich gegen die Patentierbarkeit des isolierten Humangenoms geäussert.
In einem amicus curiae Brief vom 29. Oktober 2010, im Fall Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al, 
vor dem Bundesberufungsgericht, hat das amerikanische Justizministerium seine ehemalige Politik aufgehoben, indem sie sich gegen die Patentierbarkeit des isolierten Humangenoms stellt, da sie Teil der Natur sind. Diese neue Politik könnte sehr wichtige Konsequenzen für die Heil- und Biotechbranchen mit sich tragen.


Informe Temático (Innovación, Salud): El Ministerio de Justicia americano se declara en contra de la patentabilidad del genoma humano aislado.

En un informe amicus curiae  del 29 de octubre del 2010, en el caso de Association for Molecular Pathology, et at. v. United States Patent and Trademark Office, et al., ante la Corte de apelación del circuito federal, el Departamento de Justicia reversó una antigua política al declarar que el genoma humano aislado es inelegible para los patentes, ya que forman parte de la naturaleza. Esta nueva posición podría tener un impacto enrome en las industrias medicales y de biotecnología.

Relazione tematica (Innovazione, Salute): Il US Department of Justice (il Dipartimento di giustizia degli Stati Uniti d’America) si esprime contro la brevettabilità del genoma umano isolato

In una comparsa in quanto amicus curiae datata del 29 ottobre2010, nel caso Association for Molecular Pathology, e al. v. United States Patent and Trademark Office  (l’Ufficio marchi e brevetti degli Stati Uniti), dinanzi alla Corte d’appello federale, il US Department of Justice (il Dipartimento di Giustizia degli Stati Uniti) ha dichiarato, contrariamente alla pratica consolidata, che i geni umani non possono essere brevettati in quanto parte della natura. Questa nuova posizione può avere un impatto considerevole sulle industrie mediche e biotech.

主题性报告(医疗改革): 美国司法部宣称反对基因专利权
2010年10月29日,美国司法部通过amicus curiae摘要中涉及的一起由美国联邦巡回上诉法院审理并与Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al相关的案件,以人类基因为自然地组成部分并无资格取得专利权为由,宣称推翻之前基因专利权的相关政策。这项新政策将对生物与制药企业产生巨大影响。



Other translations forthcoming.

March 8, 2006

Thesaurus : Doctrine