Financial Crime World

Here’s the article converted to markdown format with proper headings and subheadings:

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations in Luxembourg

It appears that you’ve provided an excerpt from a circular related to AML and CFT regulations in Luxembourg. The text outlines the procedures for identifying ultimate beneficial owners (UBOs) of customers, particularly in relation to legal entities such as companies, trusts, foundations, and fiducies.

Identifying Ultimate Beneficial Owners

The following key points summarize the procedures for identifying UBOs:

Trusts

In the case of trusts, control under point (v) means the power to take certain actions, including dealing with trust property, terminating or varying a trust, adding or removing beneficiaries, etc.

Threshold Approach

The prescribed indicative threshold for identifying ultimate beneficial owners is 25% plus one share or voting right of the legal person customer.

Threefold Procedure

To identify UBOs, follow these steps:

  • Identify natural persons who directly or indirectly hold or control a sufficient percentage (25% plus one) of the shares, voting rights, or ownership in an entity.
  • Where no natural person can be identified under scenario (i), identify any person who controls the legal entity via other means.
  • After exhausting all possible means and providing there are no grounds for suspicion, if no person is identified under points (i) and (ii), or if there is doubt that the person(s) identified is/are the beneficial owner(s), identify any person who holds the position of senior managing official (dirigeant principal).

Cascade Approach

Assessments under (i) and (ii) are not alternative options but cascading measures, which means each must be fully completed and formalized before resorting to measure (iii).

These regulations aim to prevent money laundering and terrorist financing by ensuring that financial institutions identify the ultimate beneficial owners of their customers, particularly in cases where there is a risk of high ML/TF activity.

If you have any specific questions or need further clarification on any of these points, let me know.