<
Anti Money Laundering (AML) in Luxembourg |
 Click to Launch Free Tutorial |
| Money laundering in Luxembourg is a fairly insignificant issue. Despite its standing as the second-smallest member of the European Union (EU), Luxembourg is one of the largest financial centers in the world and, as a result, has created a strong Anti-Money Laundering (AML) regime. Luxembourg’s strict bank secrecy laws allow international financial institutions to benefit from and operate a wide range of services and activities.
Luxembourg's financial sector laws are based, to a large extent, on EU directives. The Law of July 7, 1989, updated in 1998 and 2004, serves as Luxembourg's primary AML and terrorist financing law, criminalizing the laundering of proceeds for an extensive list of predicate offenses, including narcotics trafficking. The Law of April 5, 1993 on the Financial Sector (LoFS 93) established the foundations of the obligations of financial institutions to prevent the abuse of the financial system for money laundering purposes. A law was passed on May 23, 2005, implementing the Council of Europe's Criminal Law Convention on Corruption, an action which made private sector corruption a predicate offense for money laundering. On November 12, 2004, in an effort to bring Luxembourg into full compliance with the requirements of the EU's Council Directive 2001/97/EC on prevention of the use of the financial system for money laundering (2nd EU Money Laundering Directive), Luxembourg's parliament approved legislation updating the nation's AML laws. Established within Luxembourg's Ministry of Justice, the Cellule de Renseignement Financier (CRF) serves as Luxembourg's Financial Intelligence Unit (FIU). The CRF is responsible for receiving and analyzing Suspicious Transaction Reports (STRs) while also seizing and freezing assets when necessary. All covered entities are required to file STRs with the CRF and, though not legally required, are expected to send a copy of the report to their respective oversight authorities. Financial institutions are required to retain pertinent records for a minimum of five years; additional commercial rules require that certain bank records be kept for up to ten years. In 2008, Luxembourg implemented the EU's third AML Directive. Other AML laws that were implemented include:
The Economy of LuxembourgLuxembourg, benefiting from its proximity to France, Belgium, and Germany enjoys a high income economy which features solid growth, low inflation, and low unemployment. The industrial sector has become increasingly diversified over the years and now includes steel, chemicals, rubber, and other products. The financial sector now accounts for about 28% of the Gross Domestic Product (GDP) in Luxembourg. Agriculture is based on small, family owned farms. Although Luxemburg, like all EU members, suffered from the global economic slump in the early part of the 2000's, the country continues to enjoy an extraordinarily high standard of living; GDP per capita ranks second in the world, after Qatar. Banking in LuxembourgThe Banque Centrale du Luxembourg (BCL) was founded in 1998, at the same time as the European Central Bank (ECB) . Its foundation represents the final outcome of long efforts in connection with the creation of the European Monetary Union (Eurosystem). The BCL’s contributions are important for the Euro and for the country. The BCL is in charge of essential missions regarding monetary policy, the issuing of banknotes, financial stability, payment systems, and even economic analysis. Luxembourg's CurrencyThe currency in Luxembourg is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are: Austria, Belgium, Cyprus, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain. The Euro is the single currency for more than 320 million Europeans. The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to balance the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn. The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins. Other Key Statistics of LuxembourgTime Zone: CET (UTC+1). Daylight Savings Time: +1hr, begins last Sunday in March; ends last Sunday in October. Location: Western Europe, between France and Germany. Population: 549,680 (2014 estimate.). Capital: Luxembourgish. Languages Spoken: Luxemburgish , German, French. |
 |