On 8th August 2022, the law of 29th July 2022 (the “Law”) was published in the Official Journal of the Grand-Duchy of Luxembourg with the purpose of ensuring coherence and consistency of texts governing the fight against money laundering and the financing of terrorism (“AML/CFT”), the compliance to international standards and rules of AML/CFT and the promotion of the Financial Action Task Force.
Most crucially, the Law brings in some important changes increasing the onus and responsibility of practitioners during their professional activities treating AML/CFT offences carried out by service providers as aggravating circumstances that attract more severe criminal sanctions.
In addition, the Law clarifies customer due diligence processes and checks on new customers regardless of the risk assessment, as well as obligatory preliminary checks of The Register of Beneficial Owners (“RBO”) or The Register of Trusts or Fiduciary and compare this information with the one provided by the clients to detect errors, discrepancies, incomplete reporting, and non-registration.
Within this spirit of wider vigilance and transparency, the Law also expands the definition of professional persons who fall in scope and are subject to AML/CFT regulations by replacing the original undefined concept of services provided “by way of business” with services “by way of a business relationship”.
Other amendments of note have also been introduced, for example expanding AML/CFT obligations to lawyers acting as depositaries of bearer shares, providing for adequate risk-management systems to be put in place to identify PEP clients, reducing the maximum period allowed to trustees and fiduciaries to update RBO in relation to their clients, and so on.
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