Preface
This document forms part of the ABBL’s action plan to fight money laundering, and is designed to bring its members up to the mark in meeting the requirements involved in combatting money laundering and terrorist financing, whilst at the same time helping to enhance Luxembourg’s image as a financial market-place.
For the purposes of this document, the expression “combatting money laundering” is used to cover not only the fight against money laundering in the strict sense of the term but also the fight against terrorist financing and the unlawful proliferation of weapons of mass destruction, known for short as AML/CFT.
Effective participation by credit institutions and other financial sector professionals in the fight against money laundering presupposes, and is dependent on, a thorough knowledge of the applicable legislation and regulations.
This document is intended to assist them in the effective performance of their obligations, in accordance with the statutory and regulatory provisions applicable in the matter, and to provide various details regarding the practical implementation of the legislation. ABBL is not hereby seeking to impose new professional obligations on credit institutions and other financial sector professionals, or to interpret the legal rules.
Preventing financial channels from being used for money laundering is a top priority, and the players in the financial market-place are cooperating with a view to the application of measures adopted at both national and international levels. In so doing, and in the application of the relevant rules, it is important to ensure that the steps taken strike the right balance between, on the one hand, extreme vigilance with regard to banking and financial operations which could prove to be suspect and, on the other hand, respect for privacy. Whilst the risk of the system being used for money laundering purposes should not be underestimated, it should not be overestimated either. A targeted approach to the real risk needs to be adopted by each and every financial sector professional. That approach must be based on a good knowledge of the level of risk involved and suitable adaptation of the professional’s internal procedures.
The Law of 5 April 1993 on the financial sector, as amended, and the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended, (“the Law”) impose stringent requirements as regards combatting money laundering on, inter alia, credit institutions and the other financial sector professionals (FSPs). For the purposes of this document, the term “professional” is used without distinction to signify credit institutions and other financial sector professionals.
Under Article 39 of the Law of 5 April 1993 on the financial sector, as amended in particular by the Law of 13 February 2018, such institutions and other professionals are in essence subject, in the fight against money laundering, to three professional obligations, namely the obligation to know one’s customers, the obligation to have an adequate internal organisation and the obligation to cooperate with the authorities.
The first part of this document is devoted to an examination of certain particular aspects relating to the predicate offences on which money laundering is based and the material and personal scope of application of the relevant professional obligations. The second part deals with the content of those professional obligations, and the best practices identified to provide professionals with guidance in the implementation of the rules.
Since the Recommendations of the Financial Action Task Force (“FATF”) constitute the international standard on combatting money laundering and the financing of terrorism, a correlation table showing the equivalences between those recommendations and the structure of this AML Handbook appears in Annex I.
This AML Handbook is not intended to provide legal advice and has no normative value. Its aim is, in particular, to make it easier to follow the legal framework of AML/CFT on the basis of the interpretations, understanding and hypotheses accepted by financial actors.
Whilst every effort has been made to ensure that the information contained in this AML Handbook is pertinent and up-to-date as at the time of its publication, that information is not exhaustive.
Thus, the content of this document may change in line with the laws and regulations enacted and adopted and, as the case may be, any updates and clarifications issued by the CSSF, in the light of which this AML Handbook may be updated and supplemented in the future.
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