Financial Crime World

Luxembourg Secures Good Overall Result in FATF Mutual Evaluation Report

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The Financial Action Task Force (FATF) has published its mutual evaluation report for Luxembourg, concluding that the country has made significant strides in combating money laundering and terrorist financing. While the report highlights several areas for improvement, Luxembourg’s overall result is considered good by international standards.

Strengths of Luxembourg’s AML/CFT Framework

According to the report, Luxembourg’s existing framework for anti-money laundering and counter-terrorism financing (AML/CFT) is of high quality. The country has a robust supervision system in place, with the Commission de Surveillance du Secteur Financier (CSSF) recognized for its risk-based approach to AML/CFT supervision.

  • The CSSF’s risk-based approach was specifically praised by the FATF evaluators.
  • Luxembourg’s financial sector has made significant investments in compliance and has a solid understanding of its AML/CFT obligations.

Areas for Improvement

The report identifies several areas where Luxembourg can improve its efforts to combat money laundering and terrorist financing, including:

  • Improving communication regarding sanctions taken against deficient professionals
  • Greater efforts to prevent money laundering and terrorist financing
  • Better understanding of the risks associated with primary tax offenses and terrorism financing

Specific Recommendations

CSSF Press Releases on Sanctions

The FATF recommends that the CSSF improve its press releases on sanctions, making more information available to the sector as a whole.

Risk Assessment Capabilities

The report highlights the importance of better understanding the risks associated with primary tax offenses and terrorism financing. Luxembourg’s financial sector must continue to develop its risk assessment capabilities.

Outcome and Next Steps

Despite the areas for improvement, Luxembourg has been placed under regular monitoring by the FATF, which is considered a positive outcome given the scope of the evaluation. The country’s government has welcomed the report’s findings and committed to implementing the recommendations made by the FATF.

Accessing the Report

The full report can be accessed on the FATF website, along with additional information from the Luxembourg government.