Financial Crime World

Tighter Enforcement of Financial Sanctions in Luxembourg

Strengthening Legislative Framework

Luxembourg has taken a significant step towards ensuring rigorous and consistent application of European Union restrictive measures in financial matters. A new law, effective since last month, sets up a national monitoring committee for sanctions, bringing together key authorities to monitor implementation and develop related policies.

New National Monitoring Committee

A national monitoring committee for sanctions has been established, comprising representatives from:

  • Ministry of Finance
  • Ministry of Foreign and European Affairs
  • Financial Intelligence Unit (FIU)

The committee’s role is to:

  • Monitor the implementation of sanctions
  • Contribute to the development of related national policies
  • Meet as often as necessary, at least twice a year

Enhanced Enforcement Mechanisms

The new law has introduced a key amendment:

  • Breach of any international, European or national sanctions applicable in Luxembourg can now constitute an associated predicate offence to money laundering.

This means that the FIU is competent to receive suspicious transaction and activity reports of suspected violations of the Sanctions Law. Entities must inform the FIU immediately if they suspect a breach of sanctions and related enforcement measures and decisions.

Clarification of Regulations

The Grand-ducal Regulation of 14 November 2022 has clarified the Sanctions Law, stating that:

  • Enforcement of sanctions and informing the Ministry of Finance thereof must be done without delay
  • Enforcement does not require any prior notification

Importance of Familiarization

Entities are advised to familiarize themselves with the updated regulations and procedures to avoid any potential breaches.

Resources

For more information on international and EU sanctions, including a list of applicable EU regulations and affiliated texts, reference can be made to:

  • Luxembourg Ministry of Finance webpages
  • CSSF (Commission de Surveillance du Secteur Financier) webpages
  • European Commission webpages