The fight against money laundering and the financing of terrorism is a global and cross-border problem and therefore requires coordinated actions, especially at European level, but the specific decline of which also falls within the responsibility of each country. In this context, the case of Luxembourg, which is actively trying to combat these situations (“AML-CTF”), stands out.
Proof of this is that since March 1st 2019, pursuant to the Law of 13 January 2019, it is compulsory to identify the Beneficial Owner in the register of beneficial owners, “RBE” and on March 30th 2020 entered into effort the Law 7467, which transpose certain provisions of the 5th Anti-Money Laundering Directive (EU) 2018/843, amending the Law of 12 November 2004 on the fight against money laundering and the financing of terrorism.
This transposition fosters the national and international cooperation and impacts above all the following areas:
Extension of the scope of professionals subject to AML-CTF obligations: the new Law extends the meaning of financial institutions to every person subject to the control of the Commission de Surveillance du Secteur Financier “CSSF” for anti-money laundering purposes. In addition, virtual currency service providers as well as conservation and administration services providers, including custodian wallet providers, are now subject to a compulsory registration in the “CSSF”.
Reinforcement of the customer due diligence measures applicable to professionals and reinforcement in terms of KYC: professionals should be able to ensure the accuracy of the information regarding the beneficial owner and should be able to prove registration of the beneficial owner with the RBE.
Furthermore, each transaction that meets at least one of the following conditions must also be subject to enhanced scrutiny by the professional: complex transaction, unusually large transaction with an unusually high amount, transaction operated in an unusual pattern, and transaction without an apparent economic purpose.
Enhanced due diligence measures are necessary as well for transactions involving a “high risk country”, that means a country that appears on the list of high-risk third countries identified pursuant to Article 9.2 of Directive (EU) 2015/849 or designated as higher risk by the Financial Action Task Force (FATF).
In addition, the following lines of action can also be numbered:
Reinforcement in terms of cooperation among supervisory authorities and self-regulatory bodies: they have the power to impose sanctions and take any other measures provided by the regulations.
National and international cooperation and exchange of information for fighting against money laundering and terrorism financing: communication between the CSSF and the Commissariat aux assurances (“CAA”) with their foreign counterpart authorities acting for this purpose. As well as for the purposes of the prudential supervision of credit and financial institutions or the supervision of financial markets.
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