LexGo

Assessment of predicate tax offences in an AML/CTF context: The asset management industry should get prepared for CSSF inspections
18/11/2021

The new provisions introduced by Circular 17/650, as amended through Circular 20/744, impact the AML/CFT compliance obligations of the asset management industry.

Asset managers (as well as other regulated investment professionals) should review their internal procedures and document the risk assessment of their business activities in order to prepare for CSSF inspections.

Background

In February 2017, the CSSF published Circular 17/650 following the 2017 Luxembourg tax reform extending the money laundering offence to aggravated tax fraud and tax evasion. The release of Circular 17/650 followed the revised FATF standard of 2012/2013 and of the 4th AML Directive (Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing in Luxembourg law). This initial Circular provided general guidance for all entities falling under the supervision of the CSSF to raise suspicions of tax fraud and evasion through a (non- exhaustive) list of common indicators set out in Annex 1 of the Circular.

In July 2020, Circular 17/650 was amended by a new circular, Circular 20/744, which complements the common indicators included in Annex 1 by new indicators that are to be taken into account specifically in the context of collective investment activities and professionals providing services in that particular sector.

Professionals concerned

The Circular, as amended, is applicable to all the entities supervised by the CSSF, with a focus on investment fund managers.

Purpose

The CSSF expects professionals under its AML/CFT supervision to take these new indicators, where relevant, into account in their risk assessments and when designing risk mitigation measures proportionate to their risk exposure within the specific context of collective investment activities.

Implications

The Circular, as amended, extends the professionals’ due diligence obligations to all types of Luxembourg taxes as well as to tax offences in countries other than Luxembourg. It is to be noted that the mere attempt of committing a tax offence is punishable and falls within the scope of the Circular.

In practice, investment professionals will need to ensure that their internal processes are adapted to be able to identify the money laundering of predicate tax offences in light of the (non-exhaustive) list of indicators.

Now is the time for asset managers to review their internal processes and documentation to prepare for CSSF inspections.

Wider context

While the legal basis differs, in so far as DAC6 is concerned, it is worth highlighting that the Luxembourg tax authorities have launched investigations with tax intermediaries by requesting information on their internal policies and the availability of a tool to track analyses. There is therefore a growing pressure on market players to implement proper internal policies that are aligned with the regulations they have to abide by.

To help our clients and other service providers navigate through DAC6 regulations across all the EU jurisdictions they operate in, we have developed an IT solution, DAC6Connect© which permits DAC6 analysis in a multi-jurisdictional environment as well as connecting intermediaries and taxpayers through seamless coordination and communication. Our solution is also now available as a free mobile app, you can scan the QR code to download it from your regular store.

Voir aussi : Atoz Luxembourg ( Mr. Romain Tiffon )

[+ http://www.atoz.lu]

Mr. Romain Tiffon Mr. Romain Tiffon
Head of International and Corporate Tax
[email protected]

Tous les articles Droit bancaire

Derniers articles Droit bancaire

CSSF AML/CFT reporting tool: first reporting period approaches
21/06/2022

Following the publication of three circular letters [1] in December 2021 introducing new prudential and AML...

Read more

Introduction of a New eDesk Module – ePassporting
21/06/2022

Following the publication on 12 May 2022 of CSSF Circular 22/810 on pre-marketing and cross-border marketing notification ...

Read more

EU debates how to apply travel rule to cryptoassets
21/06/2022

Electronic payment transactions in the EU generally need to be accompanied by information about the payer and payee. EU la...

EU debates how to apply travel rule to cryptoassets Read more

EBA guidelines on the role and responsibilities of the AML/CFT Compliance Officer
19/06/2022

On 14 June 2022, the European Banking Authority (“EBA”) released its guidelines on policies and procedures in ...

EBA guidelines on the role and responsibilities of the AML/CFT Compliance Officer Read more

Derniers articles de Mr. Romain Tiffon

Securitisation entities within the meaning of the EU Securitisation Regulation no longer exempt f...
14/04/2022

On 9 March 2022, a draft law was presented to Parliament in order to remove the exemption applicable to securitisation ent...

Read more

Securitisation entities within the meaning of the EU Securitisation Regulation no longer exempt f...
10/03/2022

Yesterday, a draft law was presented to Parliament in order to remove the exemption applicable to securitisation entities ...

Read more

EU list of non-cooperative tax jurisdictions updated: Implications for Luxembourg taxpayers
22/02/2021

Today, the EU Council updated the EU list of non-cooperative tax jurisdictions. The update is an important step as it dire...

Read more

Measure denying the tax deduction of interest and royalties due to entities in blacklisted jurisd...
29/01/2021

Yesterday, the draft law which introduces a measure denying under certain conditions the corporate income tax deduction of...

Read more

LexGO Network