Luxembourg Takes Strict Stance on Anti-Money Laundering Regulations
Introduction
The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has outlined its approach to anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The CSSF aims to ensure that all professionals under its supervision comply with AML/CFT obligations, taking a risk-based approach to allocate resources effectively.
Key Aspects of the AML/CFT Approach
- Risk-Based Supervision: The CSSF will implement a risk-based approach, allocating appropriate resources to customers and products deemed high-risk.
- Prevention of Organized Crime: The regulator will prevent individuals linked to organized crime from gaining control over entities subject to its supervision.
- Cooperation with Authorities: Financial sector professionals are required to fully cooperate with the CSSF and the Financial Intelligence Unit (FIU) on AML/CFT matters.
Regulatory Requirements
Financial sector professionals must comply with:
- Customer Due Diligence Obligations
- Adequate Internal Management Requirements
- Cooperation Requirements with Authorities
Additionally, they must adhere to Regulation (EU) 2015/847 on information accompanying transfers of funds and respond promptly to requests for information from competent AML/CFT authorities.
CSSF’s Powers and Enforcement
The CSSF has broad supervisory and investigatory powers, including:
- Access to Documents and Information
- Issue Injunctions
- Administrative Fines
- Occupational Prohibitions against Non-Compliant Professionals
The CSSF cooperates closely with the FIU, exchanging information necessary for their duties. The regulator can also share information with other AML/CFT competent authorities domestically or internationally.
Conclusion
The CSSF’s actions are aimed at preventing money laundering and terrorist financing in Luxembourg’s financial sector, while ensuring the integrity of its regulatory framework.