List of high-risk third countries and persons subject to restrictive financial measures

The links given below were selected when the Vade Mecum was being drawn up. Accordingly, professionals should ensure that, when consulting them, they have an up-to-date version of the links proposed.

A – LISTS OF THIRD COUNTRIES POSING A RISK OF CORRUPTION/LACUNAE IN THE SYSTEMS FOR COMBATTING MONEY LAUNDERING AND TERRORIST FINANCING:

See for example the list of countries (corruption) published by Transparency International:

https://www.transparency.org/en/cpi/2020/index/nzl

See the website of the Council of Europe with regard to the Group of States against Corruption:

https://www.coe.int/en/web/greco/evaluations

(List regularly updated)

See the FATF list/tool concerning the FATF member states and the 9 regional FATF-type organisations, also including high-risk and other monitored jurisdictions:

http://www.fatf-gafi.org/fr/pays/#hiyysgh-risk

see Commission Delegated Regulation (EU) 2020/855 of 7 May 2020 amending Commission Delegated Regulation (EU) 2016/1675 of 14 July 2016 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council by identifying high-risk third countries with strategic deficiencies

https://eur-lex.europa.eu/legal-content/FR/TXT/HTML/?uri=CELEX:32020R0855&from=EN

The CSSF also recommends referring to the official “country” reports published by the OECD, the World Bank and the International Monetary Fund:

See also:

www.cfatf.org (caribbean financial action task force)

www.apgml.org (Asia Pacific group on money laundering)

http://www.gafilat.org/index.php/es/ (GAFI South America)

www.menafatf.org (Middle east and North Africa financial action task force)

www.eurasiangroup.org

www.esaamlg.org

www.giaba.org (intergovernmental action group against money laundering in Africa)

B – LIST OF PERSONS/ENTITIES/GROUPS SUBJECT TO PROHIBITIONS AND RESTRICTIVE MEASURES IN FINANCIAL MATTERS IN THE CONTEXT OF COMBATTING MONEY LAUNDERING AND TERRORIST FINANCING:

See the CSSF’s web page dedicated to international financial sanctions:
https://www.cssf.lu/en/international-financial-sanctions/

EU sanctions tool :

https://www.cssf.lu/en/Document/eu-sanctions-tool/

Lists issued by the European institutions: the EU rules regarding financial embargoes are systematically sent to financial sector professionals by the CSSF. They are generally intended to transform into a binding EU instrument resolutions of the Security Council of the United Nations. These lists are directly applicable as soon as they are published in the Official Journal of the European Union and are, as such, binding on professionals.

https://webgate.ec.europa.eu/europeaid/fsd/fsf/public/…/pdfFullSanctionsList/content?…

Lists issued by the Cellule de Renseignement Financier (CRF_ Financial Intelligence Unit) of the Parquet (State Prosecutor’s Department)/Ministry of Finance: the circulars issued by the Parquet are generally aimed, on the basis of the obligation to cooperate in anti-money laundering matters, first, at obtaining information about persons suspected of being connected with money laundering/terrorist financing activities and, second, freezing the assets of such persons.

The CRF link leads to the website of the Ministry of Finance: https://mfin.gouvernement.lu/en/dossiers/2018/sanctions-financiaires-internationales.html

Other lists issued by foreign national authorities: this primarily concerns the list of the OFAC (Office of Foreign Assets Control of the United States Department of the Treasury).

That list may contain a number of persons and entities suspected of being connected with terrorist financing or money laundering activities. Thus, where a professional finds that it has a direct or indirect link with a person appearing on that list, this may give rise to a suspicion of money laundering or terrorist financing on the part of the professional. The presence of the person in question on the list may be regarded as constituting evidence within the meaning of Article 5 of the Law of 12 November 2004 which could prompt the professional to submit a suspicious operations report to the CRF. Indeed, the professional cannot rule out the possibility that the reason for the inclusion of the suspect on the OFAC list is his (the suspect) connection with activities linked to terrorist financing or money laundering.

https://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx

C – FISCAL TRANSPARENCY AND THE COMMON REPORTING STANDARD

Grand-Ducal Regulation of 22 January 2021 amending the amended Grand-Ducal Regulation of 15 March 2016 implementing Article 2 (4) of the Law of 18 December 2015 on the Common Reporting Standard:

http://legilux.public.lu/eli/etat/leg/rgd/2021/01/22/a56/jo

Grand-Ducal Regulation of 1 March 2018 amending the Grand-Ducal Regulation of 15 March 2016, as amended, implementing Article 2(4) of the Law of 18 December 2015 on the Common Reporting Standard:

http://legilux.public.lu/eli/etat/leg/rgd/2018/03/01/a155/jo

On 17 October 2018 the OECD published recommendations concerning potentially high-risk “Citizenship by Investment” and “Residence by Investment” schemes:

http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/residence-citizenship-by-investment/

CHAPTER 1

CHAPTER 2

CHAPTER 1

CHAPTER 2

CHAPTER 3

CHAPTER 4

CHAPTER 5

CHAPTER 6

CHAPTER 7

CHAPTER 8

Annex I

Annex II

Annex III

Annex IV

Annex V

index

Preface

index

Preface

PART 1

CHAPTER 1

Section 1

1. Predicate offences

2. The elements constituting the offence of money laundering

2.1 The material element

2.2 The element of intent

3. Elements specific to certain predicate offences

3.1 The offence of terrorist financing

3.2 Tax crimes

4. From the original suspicion to the reporting of a suspicious operation

4.1 The notion of suspicion

4.2 The origins of suspicion

4.3 Examples of suspected money laundering

4.4 Summary of the reporting process

Section 2

CHAPTER 2

Section 1

Section 2

1. General principle

1.1 In a Member State

1.2 “Abroad”: in a third State

2. Subsidiaries and branches established in third countries whose rules do not permit the application of equivalent measures

2.1 Individual AML/CFT assessments

2.2 Customer data sharing and processing

2.3 Intra-group disclosure of information related to suspicious transactions

2.4 Transfer of customer data to Member States in the context of AML / CFT supervision

PART 2

CHAPTER 1

Section 1. Identification and assessment of risks

Subsection 1. Factors and elements indicative of a potentially higher risk as referred to in Article 3-2(I), second subparagraph of the Law

1.1 Risk factors inherent in customers

1.2 Risk factors linked to products/services/transactions/distribution channels

1.3 Geographical risk factors

1.4 International financial sanctions

1.5 Risks surrounding Virtual Assets (a.k.a. crypto assets) and Virtual Asset Service Providers

1.6 COVID 19 Threats

Section 2. Management and mitigation of risks

2.1 Reminder of the statutory and regulatory provisions of Article 4 of the Law and of CSSF Regulation No 12-02

2.2 Summary table of key elements of risk mitigation

2.3 Mitigation of specific risk factors according to the business sectors concerned

CHAPTER 2

Section 1. Customer due diligence measures

Subsection 1. The acceptance process

1. Policy for accepting new customers

2. Identification of customers and verification of their identity

Subsection 2. Identification and verification of the identity of the beneficial owners

I - Definition of the concept of beneficial owner

II - Identification of the beneficial owner(s) in certain specific cases

III - Measures to identify and verify the identity of the beneficial owners

Subsection 3. Obtaining information on the purpose and intended nature of the business relationship, including the origin of funds

Subsection 4. Exercise of ongoing due diligence in respect of the business relationship and the updating of the documents, data and information held

1. General considerations

2. Assessment of transactions and the detection of complex operations and unusual transactions

3 Activities requiring particular attention

4 Keeping documents and information up to date

5. Retention of documents and protection of personal data

CHAPTER 3

Section 1. Politically Exposed Persons

1. The risk posed by a PEP

2. Definition of a PEP