With the entry into force of the law of 29 July 2022 (the “2022 Law”) on the 12 August 2022, a series of new amendments were introduced to the Law of 13 November 2004 on the fight against money laundering and terrorist financing, as amended (the “AML Law”). Certain amendments have also been introduced in the Grand-ducal Regulation of 1 February 2010, providing details on certain provisions of the AML Law (the “AML GDR”) by Grand-ducal Regulation of 25 October 2022.

The 2022 Law imposes new requirements to professionals (within the meaning of article 2(4) of the AML Law). Professionals shall amend their policies and procedures, paying special close attention to their obligations with regards to customer due diligence.

For complying with the new obligations imposed by the 2022 Law, professionals shall:

  • Apply enhanced due diligence requirements where a client or a person purporting to act on behalf of or for the client or beneficial owner is a politically exposed person;
  • Retain copies of the documents, data and information collected as part of the due diligence process;
  • Compare the data collected with the data available in the registers of beneficial owners (where available) as part of the verification of the identity of the client and its beneficial owner(s); and
  • Determine the scope of the customer due diligence obligations based on the evaluation of risks related to assets, services, transactions, or delivery methods, as well as certain types of clients.

The CSSF has recently published the coordinated version of the AML GDR, which includes the amendments introduced by Grand-ducal Regulation of 25 October 2022.

The Grand-ducal Regulation of 25 October 2022 again pays special attention to customer due diligence, and introduces a new article 6 which calls, in the event of the performance of customer due diligence carried out by third parties, for the application of a risk-based approach which takes into account the information available on the risk level relating to the countries in which those third parties are based.

Considering the new amendments introduced to the AML Law and AML GDR, professionals must make sure that they have appropriate risk management systems, including risk-based procedures, put in place and which comply with these amendments, as well as update their AML policies and due diligence procedures in accordance with the new regulatory requirements.

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.