New EU Anti-corruption Criminal Rules On The Horizon

Luxembourg is among the countries perceived as the least corrupt according to Transparency International (score of 81/100, ranking 5^th in the world in 2024) and has ratified the main international conventions (UN, OECD, Council of Europe). However, behind these reassuring indicators, weaknesses persist as national legislation remains fragmented and is centred on the Criminal Code and prevention mechanisms are virtually non-existent.

Despite its ranking, Luxembourg is not totally free from corruption, as demonstrated by some recent convictions reported in the press.

Measures have been taken to improve the transparency of political and administrative life: a register of lobbyists has been set up in the Parliament and codes of conduct have been introduced for members of the government and senior civil servants, including for after they leave office.

In addition, there is a legal arsenal: the Criminal Code criminalises active and passive corruption, in both the public and private sectors; the law of 12 November 2004 on the fight against money laundering and terrorist financing includes obligations of vigilance against corruption; the law of 16 May 2023 implementing Directive (EU) 2019/1937 introduced a system of protection for whistleblowers.

Despite these measures, in 2024, the OECD criticised Luxembourg for its low rate of investigations into corruption, the lack of deterrent effect in its sanctions, the low level of financial resources allocated to combatting corruption and the lack of proactive detection of bribery of foreign public officials. Luxembourg's position as a financial centre and the seat of EU institutions increases its exposure to risks, particularly transnational risks. While the fight against money laundering is well established, it is not enough; by definition, clean money cannot be laundered. Preventing corruption requires specific tools that Luxembourg has not yet fully developed.

Companies, including medium-sized ones, are not immune to corruption, on the part of both donors and recipients. Supply chains remain one of the main areas of risk, and many of Luxembourg's small and medium-sized enterprises are also suppliers to large companies.

In addition, the size of the financial sector exposes the country to money flows potentially linked to transnational corruption. In Europe more generally, investment structures (AIFs, family offices, etc.) are increasingly being used as a vehicle for corruption, which is why the sector is under growing scrutiny from many authorities, including in Luxembourg. Anti-money laundering legislation alone is no longer sufficient to actively combat corruption. AIFs may be involved in entities and projects linked to corrupt public officials, making the link between private and public corruption. Intermediaries in the financial ecosystem, such as managers or investment advisers may seek to unduly influence investment decisions due to a conflict of interest. Finally, these funds (AIFs or others) may invest in portfolio companies that engage in corrupt practices.

It is interesting to note that the US Foreign Corrupt Practices Act and the UK Bribery Act now require private sector equity funds to ensure that their portfolio companies comply with minimum anti-corruption compliance programme requirements at all levels, i.e. all holdings and all portfolio companies. The absence of anti-corruption compliance programmes in portfolio companies creates a risk of legal proceedings, including criminal proceedings, against the parent company.

EU agreement reached on 2 December 2025

After long and difficult negotiations, a decisive European political agreement was reached on 2 December 2025 between the EU Parliament and the Council of the EU on the first harmonised criminal law rules to combat corruption in the EU.

The key points of this agreement, which should soon be formalised in an anti-corruption directive (the future Directive), are as follows:

• Harmonisation of offences: the future Directive will introduce uniform definitions of corruption offences. These include active and passive corruption in both the public and private sectors, trading in influence, misappropriation of funds, abuse of functions by a public office holder, obstruction of justice, concealment of the proceeds of corruption, as well as illicit enrichment derived from these offences. By unifying offences in this way, offenders are prevented from taking advantage of the differences between national legal systems to escape prosecution.
• Common minimum criminal penalties: the future Directive will set penalty thresholds with which each country will have to comply. For natural persons, each corruption offence will have to be accompanied by a minimum prison sentence (e.g. at least 3 years for certain offences and at least 5 years for the most serious forms). National legislation may provide for more severe penalties. In addition, complementary penalties will have to be applied: criminal fines, disqualification from holding public office or participating in public contracts, withdrawal of licences or subsidies, etc.
• Liability of legal persons: a major point of disagreement was the criminal liability of legal persons. Agreement has been reached on this point and each Member State will have to provide for the criminal liability of companies whose employees or directors commit corruption offences for their benefit, with harmonised financial penalties. Guilty companies will face fines of up to 3% to 5% of worldwide turnover, or at least EUR 24 million to EUR 40 million depending on the seriousness of the offence.
• Enhanced European judicial cooperation: the future Directive will emphasise the cross-border dimension of the fight against corruption. National authorities will have to cooperate more closely and exchange information to track down corruption networks without being hampered by borders. European bodies such as Europol, Eurojust, OLAF (European Anti-Fraud Office) and the European Public Prosecutor's Office (EPPO) will see their roles strengthened. In addition, common jurisdictional rules have been agreed to avoid loopholes in the procedure and better coordinate procedures at EU level.
• Whistleblowers: the future Directive will also cement the principle of whistleblower and witness protection. Anyone reporting corruption, providing evidence or cooperating with the authorities will have to be able to benefit from appropriate protection, support and assistance measures as part of the proceedings.

Impact and next steps in Luxembourg

Although Luxembourg has gradually become compliant with the international conventions to which it is a party and is responding to the recommendations made by international players, its anti-corruption legislation is still underdeveloped. It focuses mainly on the offences set out in the Criminal Code, without providing a comprehensive framework comparable to that found in France or the UK, for example. This is a problem in itself, because entities in Luxembourg may be subject to anti-corruption legislation in other countries, and if Luxembourg's arsenal and its application are not up to scratch, this can lead to difficulties in cooperation.

The future Directive will be an opportunity for Luxembourg to put the issue back on the political agenda. There are two choices open to its political leaders: limit themselves to strict implementation of the future Directive (the whole Directive and nothing but the Directive) or take advantage of it to bring Luxembourg up to the same level as its neighbours. Without resorting to gold-plating and without adding excessive regulatory burdens on businesses, Luxembourg should recognise that the fight against corruption cannot be limited to criminal law enforcement.

1) Implementation into national law. The essential first step is for Luxembourg to bring its legislation in line within the implementation deadline. Although the Criminal Code already contains offences comparable to those harmonised by the future Directive, it will be necessary to check carefully whether our Code is perfectly aligned. Similarly, maximum prison sentences will have to meet the new EU requirements and Luxembourg will have to decide whether it is satisfied with this minimum or wants to be harsher.

One key point will be the offence of abuse of office: at present, certain abuses of public office are punishable by specific offences (illegal taking of interest, misappropriation of public funds, etc.), but the future Directive introduces a broader category of "illegal or improper exercise of functions". Similarly, the concept of enrichment resulting from a corruption offence may need to be adapted.

For legal entities, it will be necessary to check whether the criminal law regime needs to be adapted. In terms of penalties, it will be necessary to introduce criminal sanctions that depend on turnover. This is an innovative approach for Luxembourg. Traditionally, the maximum fines incurred correspond to a fixed amount. It would therefore be useful to take a more comprehensive look at the fines incurred by legal entities in general, since it is difficult to justify two different methods of calculation depending on the type of offence.

2) Preventive measures. In addition to the repressive aspect, the future Directive emphasises the prevention of corruption.

Luxembourg will have to set up a specialised body that is responsible for preventing and combatting corruption, with the functional autonomy and resources needed to act effectively. At present, there is only the Comité de Prévention de la Corruption (an interministerial advisory body attached to the Ministry of Justice); other authorities may be responsible for certain specific aspects.

It will therefore likely be necessary to create a new body, such as an autonomous public establishment, that is dedicated to the fight against corruption. It could draw inspiration from the anti-corruption agencies that already exist in other countries. The important thing will be to ensure that the body in charge of prevention can act without interference, with a sufficient budget and team of specialists.

At the same time, in the interests of government efficiency, it is essential to remember to abolish or redefine the actions currently in place to avoid duplication and inconsistencies.

Each country should adopt and update a national public anti-corruption strategy, in association with civil society, to steer reforms and prevention. Luxembourg does not currently have an overall strategic document specifically dedicated to the fight against corruption. It will be necessary to start by taking stock of the situation and then define the priorities before deciding on concrete actions.

Thinking beyond the future Directive, Luxembourg may also want to consider whether it wishes to oblige companies above a certain size to implement more concrete measures. For example, in France, companies with more than 500 employees and a turnover of more than EUR 100 million are subject to the obligations of the "Sapin II" law (2016), which requires risk mapping, a code of conduct, an internal alert system, third-party assessment procedures, accounting controls and management training. It is important to note that, through the French Anti-Corruption Agency (AFA), France has also made major efforts to educate and support medium-sized businesses, encouraging them to set up proportionate anti-corruption programmes, which are a major asset, particularly when responding to calls for tenders from large groups or the public sector.

3) Impact on businesses and professionals. In future, acts of corruption or similar offences could result in much heavier financial penalties than before, not to mention the civil and reputational risk.

The future Directive should therefore be an opportunity for Luxembourg companies to reconsider their governance with regard to the risk of corruption. It is in their interest to start this work now, without waiting for the formal adoption of the future Directive and its subsequent implementation into Luxembourg law. It is also advisable to analyse the company's international activities as it may be subject to several foreign laws on corruption, in which case it will have to comply with the most stringent.

This is not simply a question of avoiding a criminal penalty, but of acting proactively to avoid risk and put in place governance and policies that deter illegal behaviour.

There are many possible courses of action in terms of anti-corruption compliance programmes, including identification and mapping of risks, codes of conduct, internal whistle-blowing procedures, enhanced due diligence on partners, staff training, etc.