Financial Crime World

Luxembourg Takes Tough Stance Against Financial Crime

The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has introduced a series of measures to prevent money laundering and terrorist financing in the financial sector.

Risk-Based Approach to Supervision

The CSSF has adopted a risk-based approach in supervising financial institutions, allocating appropriate resources to customers and products deemed higher-risk. This ensures that entities with higher risks are subject to more stringent supervision and monitoring.

Measures to Prevent Financial Crime

  • The regulator has implemented measures to prevent individuals with ties to organized crime from gaining control over supervised entities.
  • Financial professionals are expected to fully cooperate with the CSSF and the Financial Intelligence Unit (FIU) in their AML/CTF efforts.

Strengthened Cooperation with International Authorities

The CSSF has strengthened its cooperation with the FIU, exchanging information necessary for their respective duties. Additionally, the regulator can share information with other AML/CTF competent authorities at both national and international levels.

Supervisory Powers of the CSSF

  • The CSSF has been granted broad supervisory and investigatory powers to carry out its duties.
  • The regulator can access any necessary documents, request information from supervised individuals or entities, and conduct on-site inspections.
  • In cases where professionals fail to comply with AML/CTF provisions, the CSSF may issue injunctions, impose administrative sanctions, such as fines and occupational prohibitions.

Professional Obligations of Financial Sector Professionals

Financial sector professionals are required to:

  • Comply with professional obligations arising from AML/CTF texts, including customer due diligence, adequate internal management requirements, and cooperation requirements with authorities.
  • Respond promptly to requests for information from competent AML/CTF authorities regarding transfers of funds.

Conclusion

Luxembourg’s financial sector is expected to take note of the CSSF’s tough stance against financial crime, ensuring that their operations are in compliance with AML/CTF regulations to prevent money laundering and terrorist financing. The regulator has also emphasized its commitment to cooperating closely with other international authorities to combat these global threats.