At European level, the period 2021-2022 was marked by a major initiative undertaken by the EU Commission with the publication of its anti-money laundering and countering the financing of terrorism (AML/CFT) package on 20 July 2021. This set of documents includes the following four legislative proposals:
- A Regulation establishing a new EU AML/CFT Authority (AMLA);
- A Regulation on AML/CFT, containing directly applicable rules, including in the areas of customer due diligence and beneficial ownership;
- A sixth Directive on AML/CFT (“AMLD6”), replacing the existing Directive 2015/849/EU (the fourth AML directive as amended by the fifth AML directive), containing provisions that will be transposed into national law, such as rules on national supervisors and financial intelligence units in Member States; and
- A revision of the 2015 Regulation on Transfers of Funds to trace transfers of crypto-assets.
In November 2021, ALFI issued an opinion on the abovementioned legislative proposals, expressing its support to the EU Commission’s efforts to fight money laundering and the financing of terrorism, and to the deeper harmonisation of certain professional obligations of European financial industry stakeholders. However, it underlined in this opinion that some provisions could have an adverse impact on the efficiency of the anti-money laundering measures in the fund industry, in particular the envisaged rules on compliance functions, the scope of the AMLA Regulation and the assessment methodology used for selecting obliged entities falling under direct supervision of the new agency, as well as the provisions in regard of beneficial ownership.
At national level, focus was put on the following topics:
- Luxembourg’s first money-laundering/terrorist financing (ML/TF) vertical risk assessment of legal persons and legal arrangements
The assessment completes the national risk assessment of December 2020. It was carried out under the supervision of the Ministry of Justice and adopted by the Comité de Prévention du blanchiment et du financement du terrorisme on 11 February 2022. The paper was issued on 22 February 2022.
The risk assessment is performed on two levels:
- The risk of the country’s corporate environment as a whole being misused for ML/TF purposes (corporate risk), which is assessed on the basis of the capacity of Luxembourg to obtain and maintain elementary information and beneficial ownership information of legal persons and arrangements;
- The individual risk of misuse of each type of legal person and legal arrangement for ML/TF purposes (entity-type specific risk)
- The new AML/CFT external report
On 22 December 2021, the CSSF published Circular 21/788 introducing this new report, which must be prepared annually by an external AML/CFT expert in accordance with article 49 of CSSF Regulation 12-02 on the fight against money laundering, as amended.
Finally, the topic of international financial sanctions was also high on the agenda this past year. In September 2021, the Luxembourg Ministry of Finance updated its FAQs on its best practices guides in relation to financial sanctions and issued a new template for the quarterly reporting of frozen funds.
With the invasion of Ukraine at the end of February 2022, ALFI promptly established an e-mail address dedicated to practical questions ALFI members would like to raise in this regard. Further to this initiative, the ALFI AML working group has engaged in a constructive dialogue with competent authorities on the implementation of the sanctions and restrictive measures taken on European level in response to the situation.
Evelyne Christiaens, Head of Legal Department