Financial Crime World

Luxembourg Financial Intelligence Unit Reveals 2020 Report: Key Findings and Insights

The Luxembourg Financial Intelligence Unit (CRF) has recently published its annual report for 2020, providing valuable insights into the country’s financial landscape. The report highlights key trends, statistics, and concerns in the fight against money laundering and terrorist financing.

Decline in Declarations, but Increased Vigilance

According to the report, the total number of declarations received by the CRF decreased slightly from 2019 to 2020, standing at 6,364. However, this decline does not necessarily indicate a decrease in suspicious activities, as the CRF has refined its internal classification system, leading to more accurate and detailed reporting.

Fraud and Laundering on the Rise

Fraud and laundering witnessed significant growth, with fraud being the primary driver of this increase. The report attributes this surge to the COVID-19 pandemic, which has led to an unprecedented rise in fraudulent activities. Corruption declarations also continued to rise, largely due to increased vigilance by professionals and negative press coverage.

Virtual Asset Service Providers (VASPs)

  • VASPs have been added to the list of regulated entities under the Anti-Money Laundering (AML) Law.
  • The CRF received declarations from VASPs active in virtual currencies since 2016, with two entities licensed as payment institutions.
  • The report highlights the importance of monitoring transactions related to online marketplaces on the Darkweb and identifying economically unclear transaction behaviors.

Insurance Sector Growth

The insurance sector saw a significant increase in registered entities using the CRF’s online “goAML” tool, from 82 in 2019 to 116 in 2020. This growth is attributed to an awareness campaign led by the insurance regulator, the CAA (Commissariat aux Assurances).

Criminal Tax Offenses Remain a Concern

Criminal tax offenses remain a major concern, with the CRF noting that this type of offense is at the top of the list of reported primary offenses. The report highlights the importance of sound awareness and vigilance in this area.

Spontaneous Reports

  • 197 spontaneous reports were sent by the CRF to prosecution teams in 2020.
  • Although it does not provide insights into how many of these reports led to successful prosecutions, the report underscores the importance of continuous monitoring and reporting.

Conclusion

While the total number of declarations decreased, criminal tax offenses and fraud remain significant concerns. The CRF will continue to monitor VASPs and other regulated entities to ensure compliance with AML regulations. The report provides valuable insights for financial institutions, regulators, and law enforcement agencies to enhance their efforts in combating money laundering and terrorist financing.

Download the Full Report

Download the full 2020 Annual Report of the Luxembourg Financial Intelligence Unit (CRF) here: [link]