Financial Crime World

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Luxembourg’s Battle Against Money Laundering and Terrorist Financing

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In its ongoing efforts to combat money laundering and terrorist financing, Luxembourg has established the Directorate for Combating Money Laundering and the Financing of Terrorism (AML/CFT Directorate), a department of the Ministry of Justice. The AML/CFT Directorate plays a crucial role in representing Luxembourg at international meetings of the Financial Action Task Force (FATF) and participates in the development of global standards to combat money laundering and terrorist financing.

Role and Responsibilities

  • At the European Union level, the AML/CFT Directorate is actively involved in various working groups.
  • At the national level, it ensures coordination among different authorities, including law enforcement agencies, financial institutions, and professional organizations.
  • The department also leads and coordinates the national risk assessment of money laundering and terrorist financing, as well as conducts targeted “vertical” risk assessments on specific topics.

Legislation and Guidelines

The AML/CFT Directorate contributes to the development of legislative texts related to anti-money laundering and anti-terrorist financing laws, ensuring that Luxembourg complies with relevant EU directives. The department also publishes guidelines and best practices for various sectors, including:

  • Non-financial businesses
  • Legal persons
  • Virtual asset service providers

Some notable publications include:

  • National Risk Assessment of Money Laundering and Terrorist Financing 2020
  • Vertical Risk Assessments on terrorist financing and virtual asset service providers
  • Guidelines for non-financial sectors such as:
    • Trust and company services provider activities
    • Private banking

International Cooperation

The AML/CFT Directorate also participates in international efforts to combat money laundering and terrorist financing. Luxembourg is a member of the FATF and actively engages with other countries to develop best practices and share information on anti-money laundering and counter-terrorist financing measures.

Some notable FATF reports include:

  • “Best Practices on Combating the Abuse of Non-Profit Organisations”
  • “Recovering International Proceeds of Crime through Inter-Agency Networks”
  • “Misuse of Citizenship and Residency by Investment Programmes”

Conclusion

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Luxembourg’s AML/CFT Directorate plays a vital role in combating money laundering and terrorist financing, both domestically and internationally. Through its efforts, Luxembourg demonstrates its commitment to preventing financial crime and ensuring the integrity of its financial system.