OBLIGATION TO COOPERATE WITH THE AUTHORITIES
“(1) Professionals, their dirigeants and employees are obliged to cooperate fully with the Luxembourg authorities responsible for combatting money laundering and terrorist financing, in particular in the exercise of their supervisory powers (…)”.
Without prejudice to the obligations vis-à-vis the supervisory authorities or self-regulatory bodies, professionals, their directors, dirigeants and employees are required to:
The professional’s duty to collaborate with the authorities relates exclusively to the Luxembourg authorities; any foreign request for cooperation must be made through an official channel such as the system for international mutual legal assistance in criminal matters or international administrative assistance.
(a) inform promptly, on their own initiative, the Cellule de renseignement financier/Financial Intelligence Unit (…) when they know, suspect or have reasonable grounds to suspect that money laundering, an associated predicate offence or terrorist financing is being committed or has been committed or attempted, in particular in consideration of the person concerned, its development, the origin of the funds, and the purpose, nature and procedure of the operation. This report must be accompanied by all supporting information and documents having prompted the report.
All suspicious transactions, including attempted suspicious transactions, shall be reported, regardless of the amount of the transaction.
The obligation to report suspicious transactions shall apply regardless of whether those filing the report can determine the predicate offence.
(b) provide without delay to the Cellule de renseignement financier/Financial Intelligence Unit), at its request, any information required. This obligation includes the submission of the documents on which the information is based.
(…)
(1a) With regard to combatting terrorist financing, the obligation to report suspicious transactions (…) also applies to funds where there are reasonable grounds to suspect or they are suspected to be linked or related to, or to be used for terrorism, terrorist acts, a terrorist or terrorist groups or by those who finance terrorism”.
“(1) The requirement to inform the FIU without delay(…) also covers cases in which the professional came into contact with a natural or legal person or legal arrangement without entering into a business relationship or carrying out a transaction, insofar as there are suspicions or reasonable indications for suspicion of money laundering, an associated predicate offence or terrorist financing.
(2) The professional shall equip itself with the means required with respect to procedures and organisation of the AML/CFT compliance officer function which allows analysis of the reports transmitted to him and the determination of the necessity to communicate a fact or transaction to the FIU (…). To this end, the professional must register in the tool set up by the FIU. The procedures shall include the conditions, deadlines and steps for the customer relationship manager to communicate reports to the compliance officer. The analysis and the resulting decision shall be recorded in writing and made available to the competent authorities.
(3) (…) a business relationship which is the subject of a suspicion report to the FIU shall be monitored by the professional with enhanced due diligence and, where appropriate, in line with the FIU instructions. Where there are any new indications, the professionals shall lodge a supplementary suspicious transaction report.”
WHAT TO DO …. Is the professional required to determine the predicate offence?
The professional is under no obligation to actively look into the facts relating to possible money laundering, or to consider whether they are sufficiently conclusive to serve as the basis for an official investigation, or to characterise the facts in terms of criminal law, or to prove that they are true; that is a task for the competent judicial authorities.
The Law of 10 August 2018 has amended the terms of the (2004) Law and introduced the obligation for the professional to inform the FIU, in particular where it has reasonable grounds for suspecting that money laundering or a predicate offence is going on/is or has been attempted/has taken place.
Information regarding the notion of “suspicion, its origins and examples thereof (…)” is provided in point 4 (“From the original suspicion to the reporting of a suspicious operation”) of Section 1, Chapter 1.
Where (…) the professional has a doubt as to the real identity of the beneficial owner and where he is unable to remove this doubt, he shall refuse to enter into the business relationship or to carry out the transaction desired by the client and, where he knows, suspects or has reasonable grounds to suspect that money laundering, an associated predicate offence or terrorist financing is taking place, has taken place or has been attempted, he shall make a declaration (to the Public Prosecutor’s Office) in accordance with Article 5 para. (1) and (1 bis) of the Act (…)”.
“No professional secrecy applies vis-à-vis the Financial Intelligence Unit in respect of paragraph (1), paragraph (1a) and paragraph (3).”
“Countries should ensure that financial institution secrecy laws do not inhibit implementation of the FATF Recommendations.”
- Rules on non-execution of suspicious transactions and “no tipping-off”
“Professionals must refrain from carrying out transactions which they know, suspect or have reasonable grounds to suspect to be related to money laundering, to an associated predicate offence or to terrorist financing until they have informed the Financial Intelligence Unit thereof (…) and have complied with any specific instructions from the Financial Intelligence Unit. The Financial Intelligence Unit may give instructions not to carry out the operations relating to the transaction or the customer.
Where refraining from carrying out transactions (…) is impossible or is likely to frustrate efforts to pursue the beneficiaries of a suspected operation, the professionals concerned shall inform the Financial Intelligence Unit immediately afterwards.
Where the instruction is communicated orally, it must be followed by a written confirmation within three business days, otherwise the effects of the instruction cease on the third business day at midnight.
The professional is not authorised to disclose this instruction to the customer without the express prior consent of the Financial Intelligence Unit.
The Financial Intelligence Unit may order systematically and at any time the total or partial withdrawal of the order not to carry out the operations pursuant to sub-paragraph 1.”
Potential requests by the FIU for information on the reporting of suspicious transactions, and the rules on refraining from execution and “no tipping-off” with regard to such transactions, “apply even in the absence of a suspicious transaction report made by the professionals”.
“The FIU may issue a freezing order at any given moment.
To avoid the freezing order from becoming ineffective, (the professional) should not execute a transaction which (it knows) or suspect(s) to be linked to an act of money laundering or terrorist financing, as long as it has not informed the FIU of (its) suspicion by means of a suspicious operations report or by a response to a request for information received. An acknowledgment of receipt of the declarations (the professional’s) and responses (the professional’s) report by the FIU is automatically generated by goAML Web and will be sent to (the professional) via the message board, usually around midnight.
From this moment on, as long as (the professional has) not received any freezing order from the FIU, (it) may execute, under (its) own responsibility, the transaction related to (its) communications, as well as any subsequent non-suspicious transactions.”
Given that the FIU has for ten years now been receiving a growing number of suspicious transaction reports (38,744 in 2017), it cannot systematically provide feedback to a professional that has submitted a suspicious transaction report to it.
“Professionals and their dirigeants and employees shall not disclose to the customer concerned or to other third persons the fact that information is being, will be or has been reported or provided to the authorities (…) or that a money laundering or terrorist financing investigation by the Financial Intelligence Unit is being or may be carried out.
This prohibition does not apply to a disclosure to the supervisory authorities or, if appropriate, the self-regulatory bodies of the different professionals.” Nor, subject to fulfilment of the criteria set out in Section 2.3 above, does it apply in an intra-group context.
(…)
“For credit and financial institutions and the professionals referred to in Article 2 (1) (8), Article 2 (1) (9), Article 2 (1) (11), Article 2 (1) (12) and Article 2 (1) (13) (lawyers, notaries, tax advisers), in cases involving the same person and the same transaction involving two or more professionals, the prohibition laid down in the first sub-paragraph of this paragraph shall not prevent disclosure between the relevant professionals provided that they are situated in a Member State, or in a third country which imposes requirements equivalent to those laid down in this Law or in Directive (EU) 2015/849 and that they are from the same professional category and are subject to equivalent obligations as regards professional secrecy and personal data protection. The information exchanged must be used exclusively for the purposes of the prevention of money laundering and terrorist financing.”