The AML Luxembourg legislative framework has been significantly modified by the promulgation of the law of 27 October 2010 reinforcing the fight against money-laundering and the financing of terrorism. This new law was published in the Mémorial A, n° 193, dated 3 November 2010. Pursuant to the general principles of entry in force of Luxembourg law, this law will be effective three days after its publication, i.e. on 6 November 2010 (the "New AML Law").

The New AML Law is complemented by two additional specific laws (also published in the same Mémorial A issue):

(i) law of 27 October 2010 relating to the control of cash movements into, throughout or out of Luxembourg; and

(ii) law of 27 October 2010 relating to the implementation of the resolutions of the UN Security Council which contain prohibitions or restrictive measures in the financial sector against certain individuals, entities or groups in relation to the fight against the financing of terrorism. This law is being assorted with a Grand-Ducal regulation of application dated 29 October 2010, which was published in the Mémorial A, n° 196, dated 3 November 2010.

Context

This significant update of the AML Luxembourg legislation must be regarded as a direct follow-up of the Luxembourg FATF mutual report on Luxembourg issued on February 2010, pursuant to which the FATF reporters had highlighted a number of insufficiencies in the Luxembourg legislative arsenal at date. Those comments and update requests were immediately taken into account by the Luxembourg authorities by the enactment of a Grand-Ducal Regulation of 1 February 2010. That immediate response was however insufficient to cover the full scope of necessary amendments and a more comprehensive legislative intervention was therefore needed.

The legislative process at stake was conducted on a quicksilver pace: the draft bill 6163 was lodged before the Chamber of Deputies on 18 August 2010 and the full legislative process was therefore completed in two months, demonstrating the strong willingness of the Luxembourg authorities and legislator to meet the FATF requests, as well as the eagerness of Luxembourg to have the most up-to-date legislative arsenal for the purpose of efficiently combating anti-money laundering and the financing of terrorism.

Legal update

The New AML Law is a quite substantial body of law. No less than twenty-one Luxembourg bodies of law are amended by the New AML Law, among which pillars of the Luxembourg legal system (Criminal Code, the Criminal Procedure Code, law of 7 March 1980 on judicial organization). Most notably, the matrix law of 12 November 2004 on the fight against money-laundering and the financing of terrorism (the "AML Law") is also substantially amended and will require from the professionals concerned, in the meaning of the AML Law, a detailed analysis of the legal and practical implications entailed by the entry in force of the New AML Law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.