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Luxembourg Financial Sanctions and Embargoes: A Comprehensive Guide

Introduction

Luxembourg has a robust sanctions regime in place, aimed at combating money laundering and terrorist financing. The country implements international financial sanctions imposed by the United Nations Security Council and the European Union.

Scope of the Regime

According to the law of October 27, 2010, any natural or legal person operating in or from Luxembourg is subject to these sanctions.

Designated Individuals and Entities

The Grand-ducal regulation of 29 October 2010 designates individuals and entities targeted by the measures and prohibitions, which include:

  • Ban on financial activities
  • Seizure of assets
  • Restrictions on providing services

Implementation and Enforcement

The Commission de Surveillance du Secteur Financier (CSSF) plays a key role in implementing these sanctions, while the Ministry of Finance is responsible for issuing authorizations and derogations. The Office du contrôle des exportations, importations et du transit (OCEIT) within the Ministry of Economy handles trade-related sanctions.

Consequences of Breach

Breach of sanctions can result in severe penalties, including:

  • Imprisonment
  • Fines up to EUR 250,000

The Cellule de renseignement financier (Financial Intelligence Unit) is responsible for receiving and analyzing suspicious transaction reports related to money laundering and terrorist financing.

Maintaining Lists of Sanctioned Individuals and Entities

Luxembourg maintains a consolidated list of individuals and entities subject to EU financial sanctions on its CSSF and Ministry of Finance websites. No other lists are maintained by the authorities.

Licensing and Authorization System

The country’s licensing and authorization system requires certain financial activities to be authorized or licensed, with the Minister of Finance responsible for issuing these permits.

Conclusion

The article highlights the importance of adhering to Luxembourg’s financial sanctions regime to avoid severe penalties. It is essential for individuals and entities operating in or from Luxembourg to understand and comply with these regulations to avoid any legal consequences.