Luxembourg Takes a Risk-Based Approach to Combat Anti-Money Laundering and Terrorist Financing
A Crucial Step in Combating Financial Crime
The Luxembourgish authorities are taking a significant step in the fight against anti-money laundering (AML) and terrorist financing (TF). By adopting a risk-based approach, they are identifying and assessing the risks posed by various sectors and activities, allowing for targeted measures to be taken to combat financial crime.
The Directorate for Combating Money Laundering and Financing of Terrorism
At the heart of this effort is the Directorate for Combating Money Laundering and Financing of Terrorism (AML/CFT Directorate). This directorate represents Luxembourg during meetings of the Financial Action Task Force (FATF) and participates in the development of international standards on combating AML and TF.
Coordinating National Efforts
The AML/CFT Directorate plays a key role in coordinating national efforts to combat financial crime, working closely with other ministries, supervisors, law enforcement authorities, professional organizations, and associations. This includes:
- Updating the national risk assessment
- Conducting vertical risk assessments on specific topics
- Providing guidelines and best practices for various sectors
Guided by Legislation and International Standards
Luxembourg’s approach is guided by legislation aimed at preventing AML and TF, including regulations and directives proposed by the European Commission. The country has also published several reports and guidance documents, including:
- National Risk Assessment of Money Laundering and Terrorist Financing 2020
- Vertical Risk Assessments on specific topics
International Recognition
Luxembourg’s efforts have been recognized internationally, with the country being praised for its commitment to combating financial crime. Its risk-based approach is seen as a model for other nations, and its experiences are shared through international forums such as the FATF.
The Importance of Cooperation and Coordination
In a statement, officials emphasized the importance of cooperation and coordination among various stakeholders in the fight against AML and TF. They added that a risk-based approach allows for more effective targeting of efforts to combat financial crime.
Publications and Resources
The Luxembourgish authorities have published several reports and guidance documents related to AML and TF, including:
- Best practices for non-profit organizations
- Guidelines for virtual asset service providers
These publications are available in both English and French.
Conclusion
Luxembourg’s risk-based approach to anti-money laundering and terrorist financing is a significant step forward in the country’s efforts to combat financial crime. By identifying and addressing the risks posed by various sectors and activities, Luxembourg is demonstrating its commitment to protecting its financial system and combating financial crime.