CSSF Regulation No. 20-05: Strengthening Anti-Money Laundering and Terrorist Financing Measures in Luxembourg
The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has introduced new regulations to enhance the fight against money laundering and terrorist financing in the financial sector.
Risk-Based Approach to Customer Acceptance
According to CSSF Regulation No. 20-05, professionals in the financial industry must adopt a risk-based approach to customer acceptance. This includes implementing automated processes for low-risk customers. This efficient and reliable alternative to manual validation by professionals will help reduce the burden on financial institutions while maintaining effective anti-money laundering (AML) measures.
New Rules for Identifying and Verifying Identity
The regulation introduces new rules for identifying and verifying the identity of:
- Company founders when opening accounts for companies in the process of incorporation
- Beneficial owners, where applicable
Professionals must identify and verify the identity of founders and beneficial owners before completing the account opening procedure.
Occasional Transactions and AML Due Diligence
The regulation sets out specific requirements for occasional transactions carried out by professionals, including:
- Identifying and verifying customer identities before and during the transaction
- Triggering AML due diligence measures when total volume of operations reaches EUR 15,000
Transfers of Funds Regulation
The CSSF has also introduced new regulations related to transfers of funds within the meaning of Regulation (EU) 2015/847. Professionals carrying out occasional transactions in the form of transfer of funds must comply with these regulations and implement measures to detect and prevent money laundering and terrorist financing.
Effective Date and Scope
The new regulation comes into effect on [insert date] and will apply to all professionals in the financial sector operating in Luxembourg. The CSSF has emphasized the importance of compliance with the new rules, which are designed to ensure the integrity of the financial system and protect against the risks of money laundering and terrorist financing.
Key Takeaways
- Risk-based approach to customer acceptance
- Automated processes for low-risk customers
- New rules for identifying and verifying identity of company founders and beneficial owners
- AML due diligence measures for occasional transactions exceeding EUR 15,000
- Compliance with transfers of funds regulation