Luxembourg Needs to Strengthen its Anti-Money Laundering and Counter-Terrorist Financing Framework

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A Solid Foundation, But Room for Improvement

Luxembourg has a well-established anti-money laundering and counter-terrorist financing (AML/CFT) framework in place. However, there are areas where the country needs to focus more attention to improve its effectiveness.

Key Strengths:

• Authorities make good use of financial intelligence
• Effective co-operation with international counterparts
• High-quality financial intelligence products from the Financial Intelligence Unit (CRF-FIU)

Areas for Improvement

Enhancing Supervision and Enforcement

• Risk-based supervision of non-financial sectors such as trust and company services, real estate and notaries is still in its early stages
• Improve the detection, investigation and prosecution of complex money laundering cases

Focusing on High-Risk Sectors

• Focus more on sectors exposed to significant money laundering risk such as real estate
• Address professionals from the non-financial sector offering trust and company services

Improving Asset Recovery and Non-Profit Oversight

• Improve domestic asset recovery processes
• Take a risk-based approach to oversight of the non-profit organisations sector, including outreach to increase understanding of terrorist financing risks.

Conclusion

While Luxembourg has made significant progress in establishing an effective AML/CFT framework, there are still areas that require attention. By focusing on improving supervision and enforcement, addressing high-risk sectors, and enhancing asset recovery and non-profit oversight, the country can further strengthen its efforts to combat money laundering and terrorist financing.