The Inspection Générale des Finances (IGF), a French interministerial inspection service, conducted a mission at OPT-NC on Anti-Money Laundering and Terrorist Financing (AML-FT) in November 2020 and delivered its report in June 2020, noting certain non-compliances.

As a result, MAZARS, one of the major French audit firms, was commissioned by OPT-NC at the end of December to conduct a study on AML/CFT compliance in financial services. The report of the study analyses the grievances, proposes recommendations and action plans with a costing.

In addition, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), an institution attached to the Banque de France, responsible for overseeing the activity of banks and insurance companies in France, to which the IGF transmitted the audit report, opened a procedure against OPT-NC on December 23, 2020 with a deadline for response of April 2, 2021.

Mr. François FROMENT-MEURICE, Honorary State Councillor, partner of the law firm Froment-Meurice & Associés registered with the Bars of Paris, Noumea and Papeete, has been mandated to represent OPT-NC and to defend its interests before the Sanction Commission of the Autorité de contrôle prudentiel et de régulation (APCR) as a part of the disciplinary procedure.

Position of the Board of Directors

The board of directors had to decide on the 3 possible choices on the future of the financial services: 1/ stop the activity, 2/ transfer the activity to a third party, 3/ continue the activity within OPT-NC on a restricted scope, taking into account that the activity of the financial services has been structurally loss-making for several years (1.6 billion FCFP/year knowing that for 1 F of turnover, OPT-NC spends 3.13 F).

Indeed, since 2004 when French authorities transferred the management of the activity to the OPT-NC, the financial services are perceived as a public service mission without having the status.

Thus, after lengthy discussions, the directors decided on scenario 3, which validates the continuation of the financial services activity within the office on a controlled perimeter including the implementation of LCB-FT compliance.

An action plan on a restricted scope

In order to meet the demand for compliance, a 3-year action plan has been agreed with a global budget of 1 billion FCFP and the need to hire 22 people. It should be noted that beyond the 3 years, the annual recurrent cost of operating the measures will amount to 200 MF.

Five pillars have been identified to continue to operate the financial services business in a legal and regulatory manner:

• Regulatory compliance: the Monetary and Financial Code requires compliance with the fight against money laundering and terrorist financing (LCB-FT) regulations.

• Customer knowledge: it is necessary to launch a vast system of "customer knowledge", of natural and legal persons, in order to verify and/or complete the mandatory information and documents. This major long-term action will ultimately enable us to know our customers better.

• Reinforcement of control activities: COMOFI requires the control of cash deposits and withdrawals at counters a priori and a posteriori. An independent LCB-FT control unit will therefore be set up and the teams will be reinforced. Even though OPT-NC's financial services are not banking services as such, since it cannot distribute loans, it is nevertheless subject to the same regulatory constraints as banks.

• Reduction in the level of LCB-FT risk: since private legal entities (companies, EURL, patentees, associations) represent a high risk because they do not systematically provide the documents and information necessary for LCB-FT at the time of opening, it has been decided to stop opening new accounts as of April 1, 2021.

• Adjustments to non-regulated prices certain non-regulated tariffs for so-called "comfort" services (daily and ten-day statements, document and transaction searches, issuance of various certificates, audit letters, etc.) have been updated for individuals and professionals to bring them into line with the lowest price on the banking market.

In addition, a new regulatory constraint obliges the office to offer a "fragile client" package. As of September 1, 2021, eligible customers will be offered a package at 358 francs (including tax) per month, including the opening, maintenance and closing of a deposit account, a systematic authorization payment card, the payment and withdrawal of cash in a branch, 4 local or SEPA-COMPacific monthly transfers, including at least 1 standing order, as well as an unlimited number of direct debits and 2 bank checks per month.

Finally, still with the aim of contributing to limiting risks and reducing the deficit, the Board of Directors has authorized the OPT-NC to request the lifting of the obligation to open a Livret A for any person who requests it and to replace it with the possibility of doing so. Steps will be taken with the referent institutions in order to have the regulation modified.