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Luxembourg Introduces Financial Sanctions Checklist to Enhance Compliance
Luxembourg has introduced a new financial sanctions checklist aimed at ensuring the rigorous and consistent application of European Union restrictive measures, strengthening its anti-money laundering and counter-terrorism financing framework.
Strengthening Coordination
The implementation of EU financial sanctions requires a coordinated effort between national authorities to prevent any potential breaches. To achieve this, Luxembourg’s government has established a monitoring committee responsible for overseeing the enforcement of sanctions and contributing to the development of related national policies.
Composition of the Committee
The newly created committee consists of representatives from key ministries, regulatory bodies, and law enforcement agencies. It will meet as needed, with a minimum frequency of twice a year, to ensure that all stakeholders are aligned on the implementation of sanctions.
Amendments to Criminal Code
As part of this effort, Luxembourg has also amended its criminal code to include a new predicate offence to money laundering. The breach of any international, European or national sanctions applicable in Luxembourg may now constitute an associated predicate offence to money laundering, punishable by imprisonment and/or fines.
Enhancing Compliance
To enhance compliance with these new requirements, the Financial Intelligence Unit (FIU) is now competent to receive suspicious transaction reports related to suspected violations of the Sanctions Law. Entities are required to inform the FIU immediately if they know or suspect that a breach of sanctions has occurred or is ongoing.
Clarification on Regulatory Specifications
In addition, regulatory specifications regarding sanctions enforcement have been clarified by the Grand-ducral Regulation of 14 November 2022. This regulation emphasizes the importance of prompt reporting and notification to the Ministry of Finance in cases where sanctions are enforced.
Resources for Entities
For more information on Luxembourg’s financial sanctions regime, entities can refer to the dedicated webpages of:
- The Ministry of Finance
- The Commission de Surveillance du Secteur Financier (CSSF)
- The European Commission
These resources provide valuable guidance on best practices, forms, and frequently asked questions related to international and EU sanctions.