In the context of the implementation process of AMLD V1, on 8 August 2019, the Luxembourg government introduced a draft Bill of Law,sup>2 ("Bill of Law"), which notably amends the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended ("AML Law").
Under the current version of the Bill of Law, major amendments to the AML Law will include, amongst others:
- extension of the scope of the AML Law to additional professionals, such as virtual assets service providers and, where the value of the transaction or a series of linked transactions amounts to EUR 10,000 or more, persons involved in the trading, intermediation and storing of works of art;
- extension of the category of "financial institutions" to all persons subject to CSSF supervision for anti-money laundering and counter terrorist financing ("AML/CTF") purposes, thus harmonising the sanction regime, and in particular the administrative fines applicable to professionals supervised by the CSSF;
- specific enhanced due diligence measures for business relationships and transactions involving high risk countries3 ;
- addition of new factors potentially evidencing a higher risk in Annex IV of the AML Law4 ;
- harmonisation of powers, including the sanction regime, of supervisory authorities and self-regulatory bodies;
- enhanced national and international cooperation between Luxembourg and foreign competent authorities;
- enhanced protection of whistleblowers.
As well as implementing certain provisions of AMLD V, the Bill of Law also embeds in the AML Law certain provisions of (i) the Grand Ducal Regulation of 1 February 2010 providing details on certain provisions of the AML Law, as amended, and (ii), the CSSF Regulation 12-02 on AML/CTF (e.g. KYC documentation, internal controls and training of personnel). Furthermore, the Bill of Law enforces certain recommendations of the FATF5 (relating notably to due diligence obligations).
Finally but not least, no transition period is currently provided under the Bill of Law which, once adopted, would therefore be applicable four days after publication.
1. "AMLD V" refers to Directive (EU) 2018/843 of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
3. While AMLD V restricts this obligation to high-risk third countries as identified as such by the European Commission, the Bill of Law extends this obligation to any country identified as high risk by the European Commission, the FATF, the supervisory authorities or the professionals in the context of their risk assessment.
4. Namely, (i) customers who are third country nationals applying for residence rights or citizenship in exchange of capital transfers, purchase of property or government bonds, or investment in corporate entities, and (ii) transactions related to oil, arms, precious metals, tobacco products, cultural artefacts and other items of archaeological, historical, cultural and religious importance, or of rare scientific value, as well as ivory and protected species.
5. The recommendations setting forth International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation adopted by the Financial Action Task Force ("FATF") on 16 February 2012 and last updated in June 2019.
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