Luxembourg Takes a Stand Against Anti-Terrorist Financing and Money Laundering
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In the wake of growing concerns over money laundering and terrorist financing, Luxembourg has taken decisive steps to ensure compliance with anti-terrorist financing (ATF) regulations. The Grand Duchy’s financial sector is under scrutiny as it strives to prevent criminals from exploiting its institutions for illicit activities.
What is Money Laundering?
Money laundering is the process of making criminal funds appear to be of legitimate origin. It involves knowingly facilitating, by any means, the misleading justification of the origin of direct or indirect income derived from a crime or offense. Luxembourg’s Penal Code defines money laundering as an offense punishable by imprisonment and/or fine.
Combatting Money Laundering
To combat this issue, Luxembourg has implemented internationally agreed professional requirements for financial institutions operating within its borders. These include:
- Identifying customers, including beneficial owners
- Performing continued monitoring of customers and transactions
- Keeping appropriate records
- Establishing internal procedures to recognize money laundering and report any indications to the competent authorities
Primary Offenses
Money laundering primary offenses or predicate offenses refer to crimes that generate funds to be laundered. These can include:
- Illicit trafficking of narcotic drugs
- Acts of terrorism or terrorist financing
- Corruption
- Weapons trafficking
- Criminal organization or association
- Tax offenses
- Human trafficking
- Sexual exploitation
- Kidnapping, illegal detention and hostage-taking
- Fraud
- Scam
- Environmental crimes
- Counterfeiting
Terrorist Financing
An act of terrorism is defined as any crime or offense that may seriously damage a country, an international organization, or body, with the intention of intimidating the population, compelling public authorities to do or abstain from doing an act, destabilizing, or destroying the structures of a country. Terrorist financing refers to the unlawful and wilful provision of funds, assets, or goods for use in carrying out an act of terrorism.
Fraud Mechanisms
Investors may be directly exposed to various fraud mechanisms, including:
- IT frauds
- Pyramidal schemes
- CEO frauds
If an investor suffers a prejudice due to these fraud mechanisms or money laundering offenses (excluding terrorist financing), they can lodge a complaint with the State Prosecutor or investigating judge.
Complaint Filing
Complaints can be lodged at the State Prosecutor’s office in Luxembourg or Diekirch, or directly with the investigating judge. The complaint must include relevant information and evidence to support the claim. Investors may also address their complaints to any police station or the General Police Directorate.
Conclusion
The fight against money laundering and terrorist financing is a critical step in ensuring the stability and reputation of Luxembourg’s financial sector. By implementing these measures, the country aims to prevent criminals from exploiting its institutions for illicit activities and to maintain trust among investors and customers.