Let’s be fair and true – Luxembourg is the major hub for EU AML/CFT excellence.
Such a role is taken historically.
According to CSSF statistic published 2022, Luxembourgish investment market manages in total EUR 6.4 billons assets under management.
Such robust and diverse financial landscape brought Luxembourg to a leading position due to a need of structured and high impact regulations. Such regulation is possible due to a clear understanding of risks posed by sectors and legal entities represented in Luxembourg.
Therefore In 2022 the updated version of ML-TF Vertical risk assessment was published. The document aims to help local players to clearly reflect risks posed in their Business wide risk assessment.
Have you checked yours? Do you update it annually? Why?
Because Under Law 2004 you have obligation to take appropriate steps to identify, assess “and understand” the risks of money laundering and terrorist financing that they face, taking into account risk factors including those relating to their customers, countries or geographic areas, products, services, transactions or delivery channels. Those steps shall be proportionate to the nature and size of the professionals.
Article 2-2. Obligation to perform a risk assessment
(1) The professionals shall take appropriate steps to identify, assess and understand the risks of money laundering and terrorist financing that they face, taking into account risk factors including those relating to their customers, countries or geographic areas, products, services, transactions or delivery channels. Those steps shall be proportionate to the nature and size of the
(2) “The professionals shall consider all relevant risk factors before determining the overall risk level and the level and type of appropriate measures to apply in order to manage and mitigate these risks. Moreover, the professionals shall ensure that the information on the risks included in the national and supranational risk assessment or communicated by the supervisory authorities, selfregulatory bodies or the European Supervisory Authorities is incorporated in their risk assessment.”
The professionals shall document, keep up-to-date and make the risk assessments referred to in paragraph 1 available to the supervisory authorities and self regulatory bodies. The supervisory authorities and self-regulatory bodies may decide that individual documented risk assessments are not required where the specific risks inherent in the sector are clear and understood.
(3) The professionals shall identify and assess the risks of money laundering and terrorist financing which may result from the development of new products and business practices, including new
distribution mechanisms, and the use of new or developing technologies related to new or preexisting products
The professionals shall:
(a) assess the risks before the launch or use of these products, practices and technologies; and
(b) take appropriate measures to manage and mitigate these risks.”
Read below, assess and if you need help – contact us!