Financial Crime World

Here is the rewritten article in markdown format:

Luxembourg Takes Step to Combat Terrorist Financing

Strengthening Efforts Against Money Laundering and Terrorist Financing

In a significant move aimed at bolstering its efforts against money laundering and terrorist financing, Luxembourg’s Ministry of Justice has conducted its first vertical assessment of risks related to legal persons and arrangements. This critical step is designed to address vulnerabilities in the country’s financial system.

Compliance with FATF Recommendations

The vertical risk assessment was conducted under the direction of the Ministry of Justice to comply with Recommendations 24 and 25 of the Financial Action Task Force (FATF), which call for transparency and beneficial ownership information of legal persons and arrangements. The assessment specifically targets the misuse of Luxembourg companies for money laundering and terrorist financing purposes.

Methodology Used in the Assessment

The methodology used in the assessment involves analyzing risks at two levels:

  • Level 1: Focuses on the risk of misuse of Luxembourg companies
  • Level 2: Examines specific risk factors associated with certain types of entities

Key Findings of the Assessment

The main findings of the assessment highlight significant vulnerabilities in various sectors, including:

  • High inherent risk
  • Mitigating measures reduce risk to a medium residual level
  • High inherent risk
  • Decrease to a low residual level following mitigation

Non-Profit Organizations

  • Lowest risk category with an average inherent risk and very low residual risk

Trusts

  • Very high inherent and residual risks despite mitigating measures

Single-Member Companies (SAs) and Limited Liability Companies (SARLs)

  • High inherent risk
  • Medium residual risk after mitigation

Response to the Findings

In response to the findings, Luxembourg’s Ministry of Justice is taking steps to strengthen its prevention measures against money laundering and terrorist financing. The English version of the vertical risk assessment is available online at the Ministry’s website, and a French translation will be published in the coming weeks.