Luxembourg has a solid anti-money laundering and counter-terrorist financing (AML/CFT) framework and a good understanding of its money laundering and terrorist financing risks, according to the mutual evaluation report of the Financial Action Task Force (FATF), published on Wednesday 27 September.
The FATF considered that the Luxembourg authorities make good use of financial intelligence and cooperates effectively with their international counterparts. Its main strengths lie in its strong national coordination and cooperation on AML/CFT issues, at both political and operational levels.
However, Luxembourg needs to focus more on money laundering investigations and prosecutions, asset recovery and supervision of non-profit organisations and some non-financial sectors.
The Grand Duchy must maintain a sustainable trajectory to continue the efforts undertaken since the first report published in 2018 and align them with its role as an international financial hub with significant cross-border financial flows, an international clientele and high-risk products and services.
In fact, the findings relating to terrorist financing on a larger scale arising from Luxembourg’s status as an international financial centre have not been sufficiently communicated to the relevant stakeholders in the public and private sectors.
Despite the effectiveness of Luxembourg’s financial intelligence unit, its level of human resources and the increasing complexity of its role raise concerns about its ability to continue to perform its various functions effectively in the future.
Although Luxembourg is demonstrating its willingness to investigate and prosecute money laundering at a political level, the limited resources of the investigative and judicial authorities and of the Council Chamber hamper effectiveness in this area.
This positive assessment by the FATF is an asset for the capital of the Grand Duchy, which is a candidate to host the seat of the future Anti-Money Laundering Authority (AMLA) (see EUROPE 13259/10).
To read the report: https://aeur.eu/f/8sg (Original version in French by Anne Damiani)