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Implementing Anti-Money Laundering (AML) Best Practices in Luxembourg

In an effort to combat money laundering and terrorist financing, the Luxembourgish authorities have implemented a range of anti-money laundering measures. The Directorate for Combating Money Laundering and the Financing of Terrorism (AML/CFT Directorate), a department of the Ministry of Justice, plays a key role in this endeavor.

International Cooperation

  • The AML/CFT Directorate represents Luxembourg at meetings of the Financial Action Task Force (FATF) and participates in the development of international standards on combating money laundering and terrorist financing.
  • The directorate also leads and coordinates the preparatory work for mutual evaluations, ensuring that Luxembourg complies with global AML/CFT standards.

European Union Level

  • The AML/CFT Directorate participates in various working groups to ensure a coordinated approach to combating money laundering and terrorist financing across the continent.

National Coordination

  • The directorate ensures national coordination of the fight against money laundering and terrorist financing, acting as:
    • Executive Secretariat of the Committee for the Prevention of Money Laundering and Terrorist Financing
    • Inter-Ministerial Steering Committee for the Fight Against Money Laundering and Terrorist Financing
  • It also leads and coordinates the work on updating the national AML/CFT risk assessment and conducts so-called “vertical” risk assessments on specific topics.

Cross-Cutting Issue

  • The fight against money laundering and terrorist financing is a cross-cutting issue that involves other ministries, supervisors, financial intelligence units, law enforcement authorities, professional organizations, and associations.
  • The AML/CFT Directorate contributes to legislative texts concerning the fight against money laundering and terrorist financing, as well as the transposition of relevant EU directives.

Publications

  • The directorate has published several reports and guidelines on best practices for various sectors, including:
    • Non-financial businesses
    • Charities
    • Foundations
    • Virtual asset service providers
  • These publications provide valuable insights into the risks associated with money laundering and terrorist financing in these sectors and offer practical advice on how to mitigate those risks.

Key Publications

  • National risk assessment of money laundering and terrorist financing 2020
  • Vertical risk assessments on specific topics such as legal persons and virtual asset service providers
  • Guidelines for non-financial businesses and charities
  • Reports on AML/CFT risks affecting the internal market
  • FATF recommendations and methodology for assessing technical compliance with those recommendations

Conclusion

Implementing anti-money laundering best practices is a crucial step in combating money laundering and terrorist financing in Luxembourg. The Directorate for Combating Money Laundering and the Financing of Terrorism plays a key role in this endeavor, working closely with other stakeholders to ensure that the Grand Duchy remains at the forefront of international efforts to combat these threats.