France – CM C

Country Manual Credits

France

BRP has updated its Country Manual Credits for

France out of Credits Institution’s Country of Establishment (RT, BT & DEF)

Regulatory Template, Behaviour Template and Definitions and Concepts

Material changes

Following the publication of the decision rendered by the French Cour de Cassation on the 15^th of November 2023 (see Alert BRP France 5/2023) some answers regarding activities undertaken with qualified prospects have been changed.

Indeed, the decision confirms that the exceptions, listed under Article L.341-2 of the MFC, to the direct marketing rules can also be used by third countries and non-passported EEA financial institutions. As a consequence, the rules concerning direct marketing do not apply, notably, to contacts with qualified prospects in and into France. The monopoly rules remain however relevant when activities take place on the French territory.

You will find below a summary of some of the main changes resulting from this development in case law:

In France:

Prospecting activities relating to credit services undertaken occasionally with qualified prospects in France, actively or passively, are now a grey zone. A cautious approach is recommended as they could be qualified as negotiation of credit services, due to the broad interpretation of the concept of negotiation by the French authorities.

Into France:

Due to the monopoly rules, active negotiation activities via remote means of communication into France are a grey zone for qualified prospects but seem permitted if undertaken on their initiative. The activities should in any case remain occasional, due to the “bundle of indicators” method used by the French authorities to determine if a licensable activity has been undertaken on the French territory. The Credit institution should, in particular, avoid systematically sending contracts to be signed in France.

For the same reasons, the “On an occasional basis” condition has also been added where relevant for activities undertaken with non-qualified prospects via remote means of communication.

Non-material changes

In the Behaviour Template and the Regulatory Template the condition “Local provisions on the annual percentage rate of charge must be respected” has been added where relevant, to reflect what was already indicated in the RT, i.e. that the French provisions on the annual percentage rate of charge are applicable in any scenario in business relationships with French consumers.

Finally, the condition “No disbursement of the credit on the client’s bank account in the target country” has been deleted from the Behaviour Template, as this is a general recommendation that should in any case always be complied with and is not linked only to a few activities.

For more information, please contact us: info@brpsa.com

Geneva, February 20^th, 2025