Luxembourg’s Banque de Luxembourg Fined €1.32 Million for AML/FT Compliance Issues

Introduction

Banque de Luxembourg, one of the largest banks in Luxembourg, has been fined €1.32 million by the Commission de Surveillance du Secteur Financier (CSSF) after an audit revealed operational weaknesses in its anti-money laundering and terrorist financing (AML/FT) system.

Investigation and Findings

The CSSF initiated the investigation in 2021 following an audit in 2018 that uncovered the issues. The audit found certain operational weaknesses in Banque de Luxembourg’s AML/FT system, which were promptly addressed through a remediation program. Despite the findings, no evidence of any unlawful activity was discovered during the audit.

Remedial Actions

Banque de Luxembourg has taken steps to strengthen its control and compliance system to prevent similar weaknesses from arising again. The bank has implemented an organizational structure, processes, and rigorous controls to ensure strict compliance with regulations.

Commitment to Compliance

Etienne Planchard, Banque de Luxembourg’s Chief Risk Officer, emphasized the importance of compliance: “We have always worked closely with the authorities and introduced measures to monitor strict compliance with the regulations in force. Compliance is an absolute requirement for our clients and for the community as a whole.”

Implications

The fine serves as a reminder of the significance of robust compliance systems in the financial sector, particularly in light of increasingly stringent regulatory requirements. Banque de Luxembourg’s commitment to upholding high standards of ethics and compliance demonstrates its position as a leading player in Luxembourg’s financial centre.

Key Points:

• Banque de Luxembourg fined €1.32 million by the CSSF for AML/FT compliance issues
• Operational weaknesses identified during 2018 audit, addressed through remediation program
• No evidence of unlawful activity discovered during audit
• Bank has strengthened control and compliance system to prevent similar weaknesses from arising again
• Emphasis on importance of compliance in financial sector, particularly with increasingly stringent regulatory requirements