Financial Crime World

Money Laundering Detection Methods in Luxembourg Exposed: Government Entities, Enforcement, and Sanctions

Introduction

Luxembourg’s financial hub has long been a target for money launderers seeking to conceal illicit funds. The country’s robust anti-money laundering (AML) framework is enforced by various government entities, ensuring that those involved in such activities face severe consequences.

Key Government Entities Involved in AML Enforcement

  • The Financial Intelligence Unit (FIU): Responsible for receiving and analyzing suspicious reports related to money laundering offences.
  • The Economic and Financial Service of the Public Prosecutor’s Office: Relies on information from the FIU, police, and supervisory authorities to initiate investigations.

Investigation Measures and Prosecution

Luxembourg’s judicial authorities can prosecute both natural and legal persons for money laundering. Legal persons may be held criminally liable if a crime or misdemeanor is committed on their behalf by one of their legal bodies or managers.

What Constitutes Money Laundering?

Money laundering in Luxembourg involves knowingly facilitating, concealing, disguising, transferring, or converting criminal property, as well as acquiring, possessing, or using such property. The constitution of the offence implies a combination of material and moral elements.

Predicate Offences

The Criminal Code and Drug Act list predicate offences that may give rise to a money laundering offence, including acts of terrorism, weapons trafficking, illegal substances trafficking, and certain tax offences.

Defences and Sanctions

There are no defences specific to money laundering. The offence is sanctioned by:

  • Imprisonment up to five years
  • A fine ranging between €1,250 and €1,250,000
  • Other possible sanctions include confiscation of criminal property, professional prohibitions, and business closure.

Asset Forfeiture and Victim Compensation

The FIU may order the blocking of suspicious transactions during a criminal investigation or enquiry. The investigating judge can order the release or partial release of seizure at the end of the investigation. Confiscation may apply to all property used or intended to be used to commit the offence.

Limitation Periods on Money Laundering Prosecutions

Money laundering is time-barred after five years. The starting point of the limitation period depends on whether the act of money laundering is resulting from instantaneous or continuous actions.

Extraterritorial Reach of Money Laundering Law

Luxembourg authorities may prosecute money laundering against Luxembourg nationals, regardless of where the crime was committed, and anyone found in Luxembourg if the offence was committed there.