On 24 September 2021, the CSSF released its Circular 21/782 which (i) provides information on the EBA Guidelines (the “GL”) on customer due diligence (the “CDD”) and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing (“ML/TF”) risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of Directive (EU) 2015/849 (“AMLD 4”) and (ii) repeals and replaces Circular CSSF 17/661.
On 22 September 2021, the CAA released Circular-Letter 21/16 on the same topic, which repeals and replaces Circular Letter 18/4 in this respect.
The GL dated 1 March 2021 take into consideration the provisions of Directive (EU) 2018/843 (“AMLD 5”) amending AMLD 4 and, consequently, update the previous guidelines of June 2017.
The GL set out the factors to be taken into account by credit and financial institutions (the “Firms”) when assessing the ML/TF risks associated with their activities and business relationships or with an occasional transaction with a natural or legal person.
They also indicate how Firms should adapt their CDD measures to the identified ML/TF risk. They set out examples of due diligence measures, including simplified and enhanced in order to mitigate such risks.
The GL take into consideration tax crimes, new risks and emerging ones related for example to the use of RegTech solutions.
New sectoral guidelines have been added on crowdfunding platforms, providers of currency exchange services, corporate finance, payment initiation services providers and account information service providers.
The GL apply as from 26 October 2021 to both future business relationships and existing customers at appropriate times as risk assessment and mitigation is an ongoing process.
In light of these GL, Firms should review and adapt, where necessary, their internal policies and procedures.