Financial Crime World

Luxembourg’s Secret Life: Organized Crime Thrives Despite Tax Reforms

While tax agreements with multinational corporations have significantly decreased, a new wave of dubious business practices has emerged in Luxembourg, raising concerns over the country’s compliance with national and international financial laws.

Corruption and Governance

  • Luxembourg’s leadership and governance structures are considered stable, with high public trust in the government.
  • However, corruption levels are low, and the legal framework for access to information is poor.
  • The country lacks a specialized anti-corruption office, but a horizontal committee for corruption prevention has been established.

Criminal Justice and Security

  • Luxembourg’s Service de Police coordinates judicial activities at national and international levels, with a department focused on organized crime and anti-terrorism.
  • The country has eight drug law enforcement units, most of which fall under the ministry of internal security.
  • Border control has been reported to be inefficient, leaving the country vulnerable to various criminal flows.

Economic and Financial Environment

  • Luxembourg is a major center for wealth management in the eurozone and ranks among the top countries globally for investment fund activities.
  • The local financial intelligence unit is responsible for fighting money laundering, but the country has been referred to the European Court of Justice for failing to implement EU anti-money laundering legislation.

Civil Society and Social Protection

  • The country has a roadmap of cooperation between stakeholders regarding human trafficking detection and identification.
  • A new system of restorative justice has been introduced, but no legal framework has been adopted.
  • Government-funded support for victims of human trafficking includes housing, psychological support, medical, legal, and financial assistance.

Conclusion

Despite recent measures taken by the government to address these issues, concerns over Luxembourg’s compliance with international financial laws and its reputation as a haven for organized crime remain high on the agenda.