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Luxembourg’s Money Laundering and Terrorist Financing Risks: A Comprehensive Assessment

A joint effort by 15 agencies and over 50 contributors has resulted in a comprehensive report on the money laundering (ML) and terrorist financing (TF) risks faced by Luxembourg. The assessment, which involves more than 100 bilateral discussions and thousands of data points, provides a detailed picture of the country’s exposure to these threats.

Assessment Methodology

The assessment was conducted through a joint effort by 15 agencies and over 50 contributors. It involved more than 100 bilateral discussions and thousands of data points. The methodology used is based on the FATF (Financial Action Task Force) guidance on National Money Laundering and Terrorist Financing Risk Assessment.

Key Findings

• Money Laundering Threats: Primary threats to Luxembourg stem from money laundering of foreign proceeds of crime, with domestic exposure being significantly smaller.
• Terrorism and Terrorist Financing: The threat of terrorism and terrorist financing is assessed as moderate overall.
• Risk Classification: Risks are classified ranging from “very low” to “very high”, reflecting common industry practices. These ratings should be understood as an assessment of relative risk within Luxembourg.

Strategic Implications

The report’s findings will inform strategic actions and resource allocations aimed at improving Luxembourg’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime. The report provides a roadmap for authorities, financial institutions, and other stakeholders to prioritize efforts and mitigate ML/TF risks in the country.

Conclusion

Luxembourg’s comprehensive national risk assessment provides a detailed understanding of the country’s exposure to ML/TF risks. The report’s findings will inform strategic actions aimed at improving the AML/CFT regime in place, ensuring that Luxembourg remains a responsible and secure financial center.