Financial Crime World

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Luxembourg Regulators Stress AML-CTF Compliance for Cross-Border Service Providers

In a move aimed at strengthening anti-money laundering and counter-terrorism financing (AML-CTF) measures in Luxembourg, regulators have issued new guidelines requiring entities providing services on a cross-border basis to ensure compliance with relevant obligations.

Risk Assessment and Enhanced Due Diligence

One key aspect of the new regulations is the requirement for professionals to conduct thorough risk assessments when dealing with customers from high-risk countries or engaging in complex transactions. This includes enhanced due diligence measures, such as:

  • Obtaining additional information on customers and beneficial owners
  • Monitoring transaction patterns

The regulations also introduce a list of criteria that may indicate a complex and unusual transaction, which must be subject to enhanced scrutiny by professionals. These include:

  • Transactions with unusually high amounts
  • Those operated in an unusual manner
  • Those lacking an apparent economic or legal object

Cooperation between Supervisory Authorities

In addition, the new guidelines strengthen cooperation between supervisory authorities, including:

  • The Commission de Surveillance du Secteur Financier (CSSF)
  • Other national competent authorities

This includes sharing information, conducting joint inspections, and implementing common standards for AML-CTF compliance.

Internal Organization and Training

Professionals are reminded that their internal control functions must have sufficient resources and independence to verify relevant procedures, policies, and control measures. This includes:

  • Setting up appropriate procedures for hiring and training employees
  • Circulating relevant information within the organization

Industry Reaction

The new regulations have been welcomed by industry stakeholders, who see them as a necessary step towards strengthening AML-CTF measures in Luxembourg. “These guidelines demonstrate the commitment of the Luxembourgish authorities to maintaining a robust and effective AML/CTF framework,” said a spokesperson for the Luxembourg Financial Industry Federation.

Implementation Timeline

The new regulations will come into effect immediately, with professionals required to comply with the updated requirements by [insert date]. The CSSF has announced that it will conduct regular inspections to ensure compliance, and any non-compliance may result in sanctions or other enforcement actions.