Luxembourg Professionals Warned of Risk of Laundering Predicate Tax Offences
In an effort to combat money laundering and terrorist financing, Luxembourg has implemented strict regulations for professionals operating in the country. As part of these efforts, Loyens & Loeff, a leading law firm in Luxembourg, is warning professionals of the risk of laundering predicate tax offences.
Reporting Obligations
Under the Anti-Money Laundering (AML) Law, professionals are required to report any suspicious activity or transactions that may be related to money laundering, terrorism financing, or other predicate tax offences. This includes reporting:
- Any transactions that exceed a certain threshold
- Any activities that may be considered suspicious
Failure to Disclose and Tipping-Off
Professionals are also prohibited from tipping off customers about potential investigations or providing information to authorities. Failure to disclose and tipping-off can result in:
- Criminal charges
- Administrative sanctions
Obstruction of Justice
The Luxembourg Criminal Code includes specific offences relating to the obstruction of justice, including:
- Altering, falsifying, or erasing evidence
- Destroying or concealing documents or objects that may be relevant to an investigation
Compliance Programmes
Professionals operating in Luxembourg are required to implement effective AML compliance programmes to mitigate and manage risks. This includes:
- Developing internal policies and procedures
- Conducting customer due diligence
- Appointing a compliance officer
Customer Due Diligence
To comply with AML regulations, professionals must conduct customer due diligence measures, including:
- Identifying customers and verifying their identity
- Assessing the purpose of the business relationship
- Monitoring transactions
Simplified and Enhanced Due Diligence
There are simplified and enhanced due diligence requirements for certain types of persons and activities. For example:
- Professionals trading in goods or works of art may be exempt from certain AML obligations if the value of the transaction is below a certain threshold.
In conclusion, Luxembourg professionals must be aware of their reporting obligations, failure to disclose and tipping-off, obstruction of justice, compliance programmes, customer due diligence, and simplified and enhanced due diligence requirements. Failure to comply with these regulations can result in severe consequences, including criminal charges and administrative sanctions.