Financial Crime World

Luxembourg Tightens Bolts on Terrorist Financing Prevention

Increased Efforts to Combat Terrorism Financing and Money Laundering

The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has stepped up its efforts to prevent terrorist financing and money laundering. As part of its statutory mission, the CSSF ensures that all professionals under its supervision comply with anti-money laundering and combating the financing of terrorism (AML/CTF) obligations.

Risk-Based Approach

To achieve this goal, the CSSF employs a risk-based approach, allocating resources to customers and products that pose higher risks. This allows the regulator to focus on areas where the threat is greatest and minimize unnecessary burdens on lower-risk entities.

Key Benefits of the Risk-Based Approach

  • More effective allocation of resources
  • Improved targeting of high-risk customers and products
  • Reduced regulatory burden on low-risk entities

Preventing Organized Crime

The CSSF also works to prevent individuals linked to organized crime from gaining control over financial institutions. This includes monitoring for suspicious activity and taking swift action when necessary.

Measures in Place to Prevent Organized Crime

  • Monitoring of customer activity
  • On-site inspections and audits
  • Cooperation with law enforcement agencies

Cooperation and Information Sharing

Financial professionals are required to cooperate fully with the CSSF and the Financial Intelligence Unit (FIU), which shares information with the CSSF as part of its duties. This ensures that all parties have access to the necessary information to combat terrorist financing and money laundering.

Benefits of Cooperation and Information Sharing

  • Improved intelligence gathering
  • Enhanced risk assessment capabilities
  • More effective enforcement actions

Powers at the CSSF’s Disposal

The CSSF has a range of powers at its disposal, including access to documents, information requests, and on-site inspections. If a professional fails to comply with AML/CTF regulations, the CSSF can issue an injunction or administrative sanctions, such as fines or occupational prohibitions.

Sanctions for Non-Compliance

  • Injunctions
  • Administrative sanctions (fines, occupational prohibitions)
  • Public disclosure of non-compliance by the CSSF

Financial Sector Professionals’ Obligations

Financial sector professionals are also subject to strict obligations under AML/CTF laws, including customer due diligence and cooperation requirements. They must respond promptly to requests for information from competent authorities relating to transfers of funds.

Key Obligations for Financial Sector Professionals

  • Customer due diligence
  • Cooperation with competent authorities
  • Timely response to information requests