Luxembourg’s AML/CTF supervisors
A wide range of laws and rules are in place in Luxembourg to combat money laundering and terrorism financing. Professionals' adherence to their AML duties is effectively monitored both on a regular basis and if significant occurrences or advancements in their management or operations take place by supervisory agencies and self-regulatory organisations.
Three supervisory authorities in Luxembourg oversee monitoring professional sector compliance.
The CSSF is responsible for ensuring that all parties subject to its supervision, authorisation, or registration comply with their AML/CTF obligations. Credit institutions and financial industry experts are the parties that the CSSF is responsible for regulating. Professionals must completely collaborate with both the CSSF and the Luxembourg Financial Intelligence Unit (FIU), the Cellule de Renseignement Financier (CRF).
The Insurance Commission (CAA) oversees the insurance sector. The CAA regulates Luxembourg-incorporated insurance, reinsurance undertakings, and insurance professionals, as well as operations carried out in Luxembourg by foreign corporations under the principle of freedom to provide services or operate through Luxembourg-based branches. The regulatory authority must ensure that the insurance and reinsurance undertakings subject to Luxembourg legislation continue to comply with the conditions under which they are licenced to carry out their activities on an ongoing basis.
The professionals that are not governed by the CSSF or any self-regulatory body are handled by the Luxembourg Registration Duties, Estates and VAT Authority (AED).
There are also 4 self-regulatory organisations that supervise compliance with and guarantee that the AML regulations are being followed by professionals in their industry. These organisations are made up of members of the professions they represent (i.e., audit and accountancy professionals, notaries and lawyers).
Within the Luxembourg Ministry of Justice, the FIU was established. For every activity that poses a risk of money laundering, all organisations required to abide by the AML/CFT legislation are required to prepare a suspicious transaction report (STR) and submit it to the CRF.
How do you comply with AML/CTF regulations in Luxembourg?
You have a professional duty to uphold the AML/CTF Act's standards for customer due diligence (CDD), sufficient internal management, and cooperation with the authorities as a member of the financial services industry in Luxembourg.
You must also create compliance programmes that include the following.
- Creating internal guidelines, regulations, and processes
- Appointing a compliance officer at the proper level in the organisational hierarchy
- Record-keeping
- Conducting customer due diligence
- Utilising internal measures and, when necessary, establishing a separate auditing role
- Conducting employer evaluation on a regular basis
In Luxembourg, the following professions and organisations are subject to professional obligations.
- Financial industry experts and credit institutions
- Organisations and individuals working in the insurance industry
- A few pensions plan
- Collection investors, risk capital investment firms, and their management firms
- Providers of company services and trusts
- Accountants, audit firms, and statutory and approved auditors
- Agents for real estate
- In the context of certain actions, attorneys (such as bailiffs, lawyers or notaries)
- Gaming service providers
What are my AML/CTF reporting obligations?
You are expected to disclose to the FIU all suspicious transactions (even if they are simply attempted), regardless of their value, that are thought to be connected to money laundering, a related predicate crime, or terrorism financing. This requirement extends to your directors and staff as well.
