Luxembourg Amends Anti-Money Laundering Laws to Clarify Obligations of In-Scope Professionals
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In an effort to strengthen its fight against money laundering and terrorist financing, Luxembourg has introduced a series of amendments to its anti-money laundering laws. These changes came into effect on August 12 and aim to clarify the obligations of in-scope professionals, ensuring they remain up-to-date with the latest requirements.
Risk-Based Approach to Customer Due Diligence
One key amendment concerns the limits of the risk-based approach when applying customer due diligence requirements. Professionals are now required to take a more nuanced approach, considering factors such as:
- The nature of their relationship with the client
- The complexity of the transaction
- The level of risk associated with the activity
This amended approach ensures that professionals can better identify and mitigate potential risks.
Enhanced Due Diligence Requirements for Politically Exposed Persons (PEPs)
Professionals are now required to take a more rigorous approach when dealing with PEPs, including individuals who hold or have held prominent public offices, as well as their family members and close associates. This enhanced due diligence requires professionals to consider factors such as:
- The source of their wealth
- The nature of their business relationships
This amendment aims to prevent the misuse of positions of power for personal gain.
Document Retention and Transparency
Professionals are now required to keep copies of documents, data, and information collected during the client due diligence process, rather than simply maintaining references to these records. This move is designed to improve transparency and accountability, making it easier for authorities to trace the flow of funds and identify potential suspicious activity.
Beneficial Ownership Information
Trustees and fiduciaries are now required to maintain beneficial ownership information and update their files within one month of any change to this information. This ensures that they remain current and compliant with the law.
Compliance Obligations for In-Scope Professionals
In light of these changes, professionals are advised to review their anti-money laundering policies, procedures, and processes to ensure compliance with the latest requirements. The amendments aim to strengthen Luxembourg’s efforts to combat money laundering and terrorist financing, and it is essential that all in-scope professionals take steps to remain compliant.
By understanding these changes, professionals can better navigate their obligations and play a crucial role in preventing financial crimes.