Luxembourg Tightens Compliance with International Sanctions to Ensure Rigorous Application

Strengthening the Legislative and Regulatory Framework

Luxembourg has introduced new measures to ensure strict compliance with international restrictive measures in financial matters. The implementation of these measures is contained in the Law on the Implementation of Restrictive Measures in Financial Matters, which was amended by a law setting up a monitoring committee for restrictive measures in financial matters.

National Monitoring Committee

A newly created national monitoring committee will be responsible for monitoring the implementation of sanctions and contributing to the development of related national policies. The committee will comprise representatives from various government agencies, including:

• Ministry of Finance
• Ministry of Foreign and European Affairs
• Ministry of Justice
• CSSF (Commission de Surveillance du Secteur Financier)
• Commissariat aux assurances
• Administration de l’enregistrement, des domaines et de la TVA
• Financial Intelligence Unit (FIU)

The committee will meet as often as necessary to carry out its tasks, with a minimum frequency of twice a year. The creation of this committee aims to ensure that sanctions are applied consistently and rigorously in Luxembourg.

Expanded Competence for Money Laundering

Article 506-1 of the Criminal Code has been amended to include an infringement of Article 10 of the Sanctions Law and related enforcement measures as an associated predicate offence to money laundering. This means that any breach of international, European or national sanctions applicable in Luxembourg can now be considered a money laundering offence.

Suspicious Transaction Reports

The Financial Intelligence Unit (FIU) will receive suspicious transaction reports from entities if they suspect a violation of the Sanctions Law. This expanded competence aims to strengthen the legislative and regulatory framework for implementing sanctions, including asset freezing measures.

Entities are required to inform the FIU immediately if they know or suspect a breach of sanctions has occurred, is ongoing or attempted.

Clarification on Enforcement and Notification

The Grand-ducal Regulation clarifies that:

• Both enforcement of sanctions and notification to the Ministry of Finance must be done without delay.
• Prior notification for sanction enforcement is not necessary.

For further information on the Sanctions Law and international/ EU sanctions, please visit the dedicated webpages of the Luxembourg Ministry of Finance, CSSF, or European Commission. The latest EU sanctions developments can be found here.