Financial Crime World

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Luxembourg Takes Concrete Steps to Combat Money Laundering and Terrorist Financing Amid FATF Recommendations

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Luxembourg has taken significant steps in recent months to align itself with international standards set by the Financial Action Task Force (FATF) to combat money laundering and terrorist financing.

Implementation of FATF Recommendations

At the heart of these efforts is the country’s implementation of FATF Recommendations, which establish a comprehensive framework for combating money laundering and terrorist financing. Luxembourg has also drawn on EU legal frameworks, including:

  • Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing
  • Regulation 2015/847 on information accompanying transfers of funds

New Circulars and Guidance

One notable development is the publication by the Commission de Surveillance du Secteur Financier (CSSF) of two new circulars aimed at enhancing anti-money laundering and counter-terrorist financing measures:

  • Circular 19/730: Recent FATF statements regarding jurisdictions with substantial and strategic deficiencies in their AML/CFT regimes
  • Circular 19/732: Guidance on identifying and verifying the ultimate beneficial owner (UBO) of customers

National Risk Assessment and Enhanced Reporting Requirements

In addition to these circulars, Luxembourg has also taken steps to enhance its national risk assessment (NRA), which identified the investment fund and private banking sectors as high-risk areas for money laundering and terrorist financing. The country has:

  • Updated AML/CFT investment market entry forms for funds and investment fund managers
  • Introduced new reporting requirements for alternative investment fund managers (AIFMs)
  • Published frequently asked questions (FAQs) on AML/CFT for persons involved in the sector

Preparing for FATF On-Site Visit

These developments come ahead of an upcoming on-site visit to Luxembourg by FATF peer member countries. The country’s efforts to strengthen its anti-money laundering and counter-terrorist financing measures are seen as a crucial step towards enhancing financial transparency and preventing illicit activities.

Key Takeaways

  • Luxembourg has taken concrete steps to align itself with international standards set by the Financial Action Task Force (FATF)
  • The country has published new circulars and guidance on anti-money laundering and counter-terrorist financing measures
  • Enhanced reporting requirements have been introduced for high-risk sectors, including investment funds and private banking
  • Luxembourg is preparing for an upcoming on-site visit by FATF peer member countries