Financial Crime World

Luxembourg Tightens Banking Regulations to Combat Money Laundering and Terrorist Financing

As a member of the Financial Action Task Force (FATF), Luxembourg has taken significant steps to strengthen its anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, aiming to prevent financial crimes and protect the country’s financial system.

International Efforts

Luxembourg participates in international efforts to develop standards for combating money laundering and terrorist financing. The Directorate for Combating Money Laundering and the Financing of Terrorism (AML/CFT Directorate) serves as the country’s representative at FATF meetings and coordinates national efforts against money laundering and terrorist financing.

National Level Efforts

At the national level, the AML/CFT Directorate leads and coordinates the fight against money laundering and terrorist financing, ensuring effective coordination among:

  • Ministries
  • Supervisors
  • Financial intelligence units
  • Law enforcement authorities
  • Professional organizations
  • Associations

Legislative Texts and Guidelines

To achieve this goal, the AML/CFT Directorate contributes to the development of legislative texts related to anti-money laundering and anti-terrorism financing. The Ministry of Justice has published:

  • Risk assessments for various sectors
  • Guidelines and best practices for:
    • Non-financial institutions
    • Virtual asset service providers
    • Legal persons
    • Legal arrangements

Regulations and Directives

The government has issued regulations and directives aimed at preventing money laundering and terrorist financing, including:

  • Due diligence requirements
  • Customer identification procedures
  • Reporting obligations for financial institutions and other designated entities

International Initiatives

In addition to its national efforts, Luxembourg actively participates in international initiatives to combat money laundering and terrorist financing. The country is committed to implementing FATF recommendations and has developed guidelines and best practices on topics such as:

  • Beneficial ownership
  • Transparency
  • Risk-based approaches

Recognition by the FATF

The government’s efforts have been recognized by the FATF, which praised Luxembourg for its commitment to combating money laundering and terrorist financing in its latest evaluation report.