Financial Crime in Luxembourg: Definition, Money Laundering, and Terrorist Financing
Introduction
In recent years, financial crime has become a significant concern in Luxembourg, with criminals employing complex methods to launder money and evade detection. This article aims to explore the definition of financial crime, including money laundering and terrorist financing.
Definition of Financial Crime
According to the Luxembourg Penal Code, money laundering is defined as knowingly facilitating the misleading justification of the origin of income generated from a predicate offence. This involves making criminal funds appear to be of legitimate origin.
- Participating in transactions related to property or proceeds of a predicate offence with the intention of concealing their true nature.
- Acquiring, holding, or using such property knowing it originated from a predicate offence can also lead to charges of money laundering.
Consequences and Penalties
Money laundering is punishable by imprisonment and/or a fine. The introduction of criminal money into the financial system puts professionals in the sector at risk of being exploited for illegal activities.
Prevention Measures
To combat financial crime, Luxembourg has implemented internationally agreed professional requirements on institutions operating in the country. These include:
- Identifying customers
- Performing continued monitoring
- Keeping records
- Establishing internal procedures to recognize and report suspicious transactions
Predicate Offences
Crimes or offences that generate funds to be laundered are referred to as primary or predicate offences. Examples of such crimes include:
- Drug trafficking
- Terrorism
- Corruption
- Fraud
The money laundering offence committed in Luxembourg can be punishable even if the underlying crime was committed abroad.
Terrorist Financing
Terrorist financing is defined as providing funds or assets with the intention of using them for terrorist activities. This is an autonomous offence punishable by imprisonment and/or a fine.
Investor Protection
Investors may be directly exposed to various fraud mechanisms, including:
- IT frauds
- Pyramidal schemes
- CEO frauds
If an investor suffers prejudice due to one of these mechanisms or a money laundering offence, they can lodge a complaint with the State Prosecutor or an investigating judge.
Filing a Complaint
Further information on filing a complaint is available on the website www.justice.public.lu.
Conclusion
The Luxembourg authorities take financial crime seriously and are committed to protecting investors and maintaining the stability of the financial sector. Understanding the definition of financial crime, money laundering, and terrorist financing is crucial in preventing these criminal activities and ensuring a safe investment environment.