Luxembourg Tightens Grip on Terrorist Financing Laws

Enhanced Efforts to Combat Money Laundering and Terrorism Financing

The Luxembourg Financial Sector Supervisory Authority (CSSF) has intensified its efforts to combat money laundering and terrorist financing in the country. The CSSF is implementing a risk-based approach to ensure that all professionals under its supervision comply with anti-money laundering and combating the financing of terrorism (AML/CTF) obligations.

Key Aspects of the CSSF’s Framework

Risk-Based Approach: The CSSF allocates resources effectively, targeting high-risk customers and products.
Cooperation Requirements: Financial sector professionals must fully cooperate with the authority as well as the Financial Intelligence Unit (FIU).
Supervisory Powers: The CSSF has broad supervisory powers, including access to documents, request for information from supervised persons, and on-site inspections.

Consequences of Non-Compliance

Administrative Sanctions: Failure to comply with AML/CTF provisions may result in fines or occupational prohibitions.
Public Disclosure: The CSSF will make its sanctions public.
Criminal Penalties: Criminal courts may impose additional penalties on professionals who deliberately violate relevant laws.

Customer Due Diligence and Cooperation Requirements

Financial sector professionals must:

Adhere to customer due diligence obligations
Meet adequate internal management requirements
Cooperate with authorities regarding information accompanying transfers of funds
Respond promptly to requests for information from competent AML/CTF authorities