Luxembourg has an effective legal framework against money laundering and terrorist financing. Businesses are obliged to comply with the regulations created under this legal framework. Institutions that do not comply with these regulations may be subject to severe penal sanctions.
Therefore, businesses in Luxembourg are not often exposed to such risks. Still, some corruption and money laundering cases have forced the private and public sectors to deal with serious problems. So, Businesses have significant responsibilities to comply with legal regulations and to prevent money laundering.
Luxembourg is a FATF member since 1990.
According to the published by FATF in 2010, last Mutual Assessment Report on the implementation of anti-money laundering and counter-terrorism financing standards in Luxembourg, Luxembourg is compatible and largely compliant for 9 of the FATF 40 + 9 Recommendations, 6 For 5 of the recommendations, it was evaluated as Partially Compliant or Incompatible.
Also, FATF said in a statement in February 2014 that Luxembourg has made significant progress in addressing the shortcomings identified in the February 2010 mutual assessment report. Thus, it was decided that Luxembourg should be excluded from the regular follow-up process.
Luxembourg has various laws and regulations to fight money laundering and terrorist financing. And, Luxembourg's essential regulator is Commission de Surveillance du Secteur Financier (CSSF). CSSF is responsible for overseeing lenders, investment companies, funders, and all other financial regulations.
Also, Luxembourg's financial sector laws are largely based on EU directives. Known as Luxembourg's primary AML and terrorist financing law, the law was published on 7 July 1989. It was also updated twice, in 1998 and 2004. The law has an extensive premise list of crimes that point to money laundering and terrorist financing.
Another law against money laundering in Luxembourg is the Financial Sector Act (LoFS). This law controls whether organizations use their financial systems as a tool for money laundering activities. Its purpose is to prevent businesses from misusing their financial systems.
Cellule de Renseignement Financier (CRF), the Luxembourg Financial Intelligence Unit, was established within the Luxembourg Ministry of Justice. All organizations obliged to comply with the regulations must create a Suspicious Transaction Report for any activity involving money laundering risk and report it to the Cellule de Renseignement Financier (CRF).
The laws and regulations constituted in Luxembourg to prevent money laundering and terrorist financing are quite extensive. And, Businesses are obliged to comply with these regulations. Businesses that do not comply with these regulations are subject to various criminal sanctions.
Sanction Scanner has AML solutions created according to internationally existing policies and procedures. In this way, businesses can determine their rules within the scope of the most appropriate and valid regulations for the sector.
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