Luxembourg Takes Steps to Enhance AML/CTF Efforts Amid FATF Scrutiny
Background
In response to its last Mutual Evaluation report, Luxembourg has implemented various measures to improve its national money laundering and terrorist financing (ML/TF) risk understanding. While some initiatives have already shown positive results, others are still too recent to be fully assessed.
FATF Standards Compliance
Luxembourg has consistently demonstrated strong technical compliance with the Financial Action Task Force (FATF) Standards. However, its ML efforts in the financial sector remain under close scrutiny due to its status as a significant international financial hub. The country’s substantial cross-border financial flows and high-risk products and services make it essential to prioritize AML/CTF measures.
Terrorism Financing Risks
Terrorism financing risks are expected to see further developments, with targeted financial sanctions also likely to be a focus area. This increased attention is likely to put pressure on Luxembourg’s market, with supervisors such as the Agency for the Supervision of Savings and Social Welfare Institutions (AED) increasing onsite visits and scrutinizing governance and policies implemented by firms.
Follow-up Report
As FATF prepares its follow-up report in three years’ time, Luxembourg must maintain its strong efforts to address weaknesses identified. PwC’s industry-specialised teams, comprising experts focused on transaction monitoring, sanctions, and terrorist financing, are well-positioned to support Asset and Wealth Management firms supervised by the AED, as well as Insurance players under the purview of the Commissariat aux Assurances (CAA).
Services Offered
Our services aim to boost effectiveness and efficiency while reducing compliance costs for clients. Our team can help with:
- Transaction monitoring and screening
- Sanctions monitoring and advisory services
- Terrorist financing risk assessment and mitigation strategies
- AML/CTF policy development and implementation
- Training and awareness programs for staff