Luxembourg Pioneers Fight Against Money Laundering: What You Need to Know

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Luxembourg was a trailblazer in the fight against money laundering, introducing legislation to combat the scourge as one of the first countries in the world. Initially focused on tackling drug trafficking, the country has since expanded its efforts to encompass a broader range of criminal activities.

Evolution of Anti-Money Laundering Laws

Over time, Luxembourg’s anti-money laundering laws have evolved significantly. The definition of money laundering itself has been broadened, along with the list of primary offenses and professions that fall under the scope of the law.

Preventative Approach

Verification of Client Identity

At the heart of the country’s strategy is a preventative approach. Financial institutions, including insurance companies, are required to verify the identity of their clients or beneficial owners before establishing a business relationship or processing any transactions.

Scrutiny of Transactions

Throughout their dealings with clients, these financial institutions must also scrutinize requests for transactions, paying particular attention to the source of funds. Moreover, they are duty-bound to proactively report any suspicious activity that may be indicative of money laundering to the Luxembourg Financial Intelligence Unit (FIU).

Note: The FIU is responsible for receiving and analyzing reports of suspicious transactions, as well as providing information and intelligence to other agencies involved in combating financial crime.