Significant changes have been brought recently to the Anti-Money Laundering ("AML") legislation.
The Luxembourg Law of 13 February 2018 (“Amending Law”), which entered into force on 18 February 2018, introduces amendments to, amongst others, the Luxembourg Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended (“2004 Law”).
The Amending Law partially transposes Directives 2015/849 (the “4th AML Directive”), inter alia aiming at aligning the European regulatory framework with the decisions taken by the Financial Action Task Force (FATF) in 2012. The qualification of certain tax crimes as predicate offences falling within the scope of the 2004 Law, as provided for by the 4th AML Directive, became effective as from 1 January 2017 (please see our Newsletter May 2017).
It should be noted that the provisions of 4th AML Directive regarding the implementation of a register of beneficial owners and a register of trusts are not covered by the Amending Law but are treated separately in two other bills of law which have not yet been adopted: Bill of Law 7217 (register of beneficial owners) and Bill of Law 7216 (register of trusts).
Key changes of the Amending Law are the following:
- Amended definition of beneficial owner of corporate entities and trusts;
- Setting of different thresholds with respect to the carrying out of customer due diligence measures;
- Enhanced requirement for professionals carry out a risk assessment;
- Requirements regarding (local and foreign) politically exposed persons;
- Emphasis on data protection requirements and employee training;
- Record-keeping of documents and information at the request of competent authorities;
- Increased sanctions and new injunction and sanction powers for Supervisory Authorities;
- Increase of criminal sanctions.