Anti-money laundering: New primary offences and procedures

With effect from 1 January 2017, the Law of 23 December 2016 relating to the implementation of the 2017 tax reform has included aggravated tax evasion (fraude fiscale aggravée) and tax fraud (escroquerie fiscale) (or attempts to commit such offences) as criminal tax offences constituting primary offences (infractions primaires) of money laundering under Article 506-1 of the Luxembourg Criminal Code. This means that the re-investment of the proceeds resulting from criminal tax offences committed as from 1 January 2017 constitutes a money-laundering offence under the Law of 12 November 2004 relating to the fight against money laundering and financing of terrorism (“AML Law”). 

In this context, the Luxembourg financial supervisory authority (Commission de Surveillance du Secteur Financier ("CSSF")) issued Circular CSSF 17/650 on 17 February 2017 for the attention of all professionals of the financial sector supervised by the CSSF. The Circular has been prepared by the CSSF together with the financial intelligence unit established at the public prosecutor’s office (“CRF”) and gives specific details on the practical application of the rules by professionals of the financial sector and providing also a list of  situations and circumstances that may be indicators of tax related offence.

The Circular does not amend existing regulations but emphasises that professionals of the financial sector have to adapt their due diligence measures with respect to these new primary offences in tax matters, irrespective of whether the customers are Luxembourg tax resident or not.

It should be noted that the CRF has issued two new guidelines, effective as from 1 January 2017, for the attention of all professionals subject to the AML Law:

(a) The « Déclaration des opérations suspectes », replacing CRF Circular 22/10 dated 8 November 2010, requiring that declarations of suspicious transactions are to be made according to the procedure of the new electronic secured and standardised communication system, named “goAML”, already used by several foreign financial intelligence units1 .

A prior registration with goAML has to be made by the professionals which require the use of a so-called LuxTrust certificate for the professional to access the registration process. The guidelines describe the declaration process to goAML and refer to additional leaflets detailing how to complete the various standard forms.

(b) The guidelines with respect to the "Blocage des transactions suspectes ", replacing CRF Circular 2015/01 dated 6 January 2016, provides guidelines with respect to procedure in case of suspicious transactions, the handling of blocked transactions and the interaction with the CRF.

1.Already used by 15 foreign financial units (among others, South Africa, Morocco, The Netherlands, Finland and Denmark) and to be put in place in (Germany, Ireland, Liechtenstein, Monaco, United Arab Emirates).