CSSF provides further guidance on money laundering indicators in the collective investment sector

On 3 July 2020, the Luxembourg supervisory authority for the financial sector, the Commission de Surveillance du Secteur Financier (the “CSSF”), published a new circular letter n°20/744 (“Circular Letter 20/744”), complementing CSSF circular letter n°17/650 of 17 February 2017 (the “Circular Letter 17/650”). As a reminder, the Circular Letter 17/650 provides guidance on the extension of the offence of money laundering to aggravated tax fraud (fraude fiscale aggravée) and tax evasion (escroquerie fiscale) and on applicable anti-money laundering and counter-terrorist financing (“AML/CFT”) professional obligations.

The Circular Letter 20/744 amends appendix 1 of the Circular Letter 17/650, in order to include a list of indicators to be specifically taken into account for collective investment activities. Therefore, in addition to common indicators likely to reveal a possible laundering of a predicate tax offence, sector specific indicators have been included.

These sector specific indicators enable relevant professionals to adapt their AML/CTF risk assessments and risk mitigation measures to the particular context of collective investment activities.

The additional list of indicators includes, inter alia, the following set-ups:

  • use of complex investment structures by undertakings for collective investments (“UCIs”);
  • use of business models by investment fund managers (“IFMs”) resulting in tax base erosion;
  • UCIs carrying out investment transactions on unregulated markets where the economic beneficiaries of the counterparties to the transactions and/or their intermediaries are located in high risk jurisdictions;
  • use of portfolio management techniques leading to tax arbitrage or tax refund that have been or could be considered as aggravated tax fraud/tax evasion;
  • illegal use of the SICAR (“Société d’Investissement en Capital à Risque”, an investment company in risk capital as defined under the law of 15 June 2004) status by UCIs which has a significant tax impact;
  • lack of information on investors leading to the inability for a UCI or an IFM to make adequate and compliant subscription tax declarations;
  • distribution by a UCI or an IFM of units in a country where the reporting requirements allow their investors to deduct or levy withholding taxes.

The Circular Letter 20/744 is accessible under the following link (only in English for now).


Aurélia Viémont, Counsel | Avocat à la Cour

Aurélien Hollard, Partner | Avocat à la Cour

Benjamin Bada, Partner | Avocat à la Cour

Voir aussi : CMS Luxembourg

[+ http://www.cms-db.com]

Click here to see the ad(s)
Tous les articles Droit bancaire

Derniers articles Droit bancaire

La détection des comportements criminels au sein des entreprises via les mécanismes de lutte co...

Les entreprises assujetties à la loi du 12 novembre 2004 relative à la lutte contre le blanchiment et le fin...

Read more

CSSF – 2020 Survey related to the fight against money laundering and terrorist financing

The annual online survey for the year 2020 to collect standardised key information concerning money laundering and terrori...

Read more

CSSF launches its 2020 survey collecting standardised key information concerning money laundering...

On 27 January 2021, the Luxembourg supervisory authority for the financial sector, the Commission de Surveillance du ...

Read more

Issuance and settlement of securities directly on blockchain: now a reality in Luxembourg

Last summer in one of our e-alerts, we shared our insights on the key features of the bill of law n°7637 all...

Read more

LexGO Network