Financial Crime World

Global Agencies Unite to Assess Money Laundering and Terrorist Financing Risks in Luxembourg

A comprehensive report published today brings together the expertise of over 15 agencies, more than 50 specific contributors, and thousands of data points from peer practice examples. The assessment provides a detailed analysis of the inherent risks of money laundering (ML) and terrorist financing (TF) in Luxembourg.

Factors Contributing to High ML/TF Risks

According to the report, Luxembourg’s economy, openness, and structural factors contribute to its high level of ML/TF risks. As a large financial center, the country is attractive for legitimate businesses, which can also make it vulnerable to illicit activities.

Assessment Findings

The assessment, carried out in line with Financial Action Task Force (FATF) definitions, identified threats from money laundering of foreign proceeds of crime as Luxembourg’s primary concern. Domestic exposure to ML was found to be significantly smaller. The report also assessed the threats of terrorism and terrorist financing as moderate overall.

Here are the key findings:

  • Money Laundering (ML): very high external exposure, medium domestic exposure, very high overall threat level
  • Fraud and Forgery: very high external exposure, high domestic exposure, very high overall threat level
  • Tax Crimes: very high external exposure, medium domestic exposure, very high overall threat level

Vulnerabilities Identified

The assessment also highlighted vulnerabilities in various areas, including:

  • Corruption and bribery
  • Drug trafficking
  • Cybercrime

Recommendations for Improvement

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.

Availability of the Report

The full report is available for download from the Luxembourg Financial Intelligence Unit website.

Note: The report’s authors consulted extensively with judicial authorities, conducted bilateral meetings, and drew on a mix of research, data available, expert judgement, and peer practice examples.