On 8 August 2022 , the law of 29 July 2022 (the “Law”) was published in the Official Journal of the Grand-Duchy of Luxembourg.
The Law is intended, i.a., to ensure the coherence of the texts governing the fight against money laundering and the financing of terrorism ("AML/CFT") and their compliance with the international standards on AML/CFT and the proliferation of the Financial Action Task Force (the "FATF"). It therefore notably amends the law of 12 November 2004 on the fight against ML/TF (the "AML Law").
Generally speaking, in the definitions of persons subject to the AML Law (the "Professionals"), the Law replaces the undefined concept of "by way of business" with that of "by way of a business relationship", as defined in the AML Law.
Thus, a trust and company service provider (the "TCSP") is any natural or legal person who provides any of the listed services under the AML Law to third parties by way of a business relationship.
Amongst these, the TCSP may perform certain functions including that of "director and secretary" of a company. These terms which derive from the from AML Directive 2015/849 are not usually used in Luxembourg law, which instead refers to the terms "gérant, administrateur, membre du directoire". The Law therefore adds these terms to clarify the functions that the TCSP may perform.
Similarly, in order to comply with FATF Recommendation 22 and to remove any ambiguity, the Law provides that the provision, in the context of a business relationship, of a registered office, business address, correspondence or administrative address or business premises is a sufficient condition to be designated as a TCSP under the AML Law.
Lawyers are subject to the AML Law when they perform certain tasks listed under the AML Law. The list of these tasks is completed and from now on, they will be subject to the AML Law when they act as depositories of bearer shares, in accordance with the FATF recommendations.
Regarding customer due diligence, the obligation to identify the customer and the beneficial owner (the "BO") is applicable regardless of the Professionals' risk assessment. When verifying the identity of the BO prior to the establishment of a business relationship or the execution of a transaction, Professionals must consult the register of beneficial owners (the "RBO") or the register of trusts or fiduciaries (the "RFT"). In addition to registering the information on the BO and collecting evidence of this registration, they must now compare their information with that of the registers in order to detect possible erroneous data or the lack of all or part of the data, or the lack of a registration, modification or deletion. The Professionals shall proceed in the same way in the context of the exercise of the monitoring of the business relationship.
They must also keep a copy of documents, information and data that are necessary to comply with customer due diligence obligations, not just the reference to the documents.
Furthermore, Professionals may apply simplified customer due diligence measures when they identify a lower risk of money laundering and terrorist financing based on their risk assessment.
For transactions or business relationships with politically exposed persons, Professionals should, inter alia, have in place adequate risk management systems, including risk-based procedures, in order to determine whether the client, the person purporting to act for and on behalf of the client or the BO is a politically exposed person, in accordance with FATF Recommendation 12.
As regards cooperation between competent authorities, the latter may request their foreign counterpart authorities to carry out an on-site investigation or inspection in the territory of the counterpart authority in question. Subject to the consent of such foreign counterpart authorities, agents from the competent authorities may participate to or carry out the investigation or inspection on-site. Furthermore, competent authorities may comply with a duly motivated and justify request from a foreign counterpart authority to carry out an investigation or inspection on-site, in the context of their missions in AML-CTF matters, at the level of persons subject to their respective supervision in accordance with Article 2-1 of the AML Law and established in the Grand Duchy of Luxembourg, subject to certain conditions.
Finally, the Law also amends the law of 10 July 2020 establishing a RFT in order to set the maximum period for trustees and fiduciaries to update the information contained in the RBO at one month after any change.