The Commission de Surveillance du Secteur Financier (the “CSSF”) has communicated several press releases related to the fight against money laundering and terrorist financing these last few days. Safe is to say that anti-money laundering and terrorist financing (“AML-CTF”) matters will be at the centre of attention end of 2019 and 2020.
Persons involved in AML/CFT for a Luxembourg investment fund or investment fund manager supervised by the CSSF for AML/CFT purposes
The CSSF has specified in its FAQ of 25 November 2019 for investment funds and investment managers, that every Luxembourg investment fund and investment fund manager subject to AML-CTF supervision is legally required to appoint:
- a person who is responsible for compliance with AML-CTF professional obligations among the members of their management bodies (“RR”); and
- if the size and nature of the activity so require, a compliance officer (“RC”).
This means in practice for investment funds that the RR can be the board of directors or one of its members and that the RC may be a member of the board or a third party (for example an employee of the investment fund manager (“IFM”)). The RC must, in principle, be available in Luxembourg. However, on an exceptional basis, it may be acceptable that the RC is located outside Luxembourg, typically if the IFM and its relevant staff member acting as RC is not established in Luxembourg.
This also means in practice for IFMs that the RR can be the board of directors or one of its members and the RC shall be the compliance officer.
Professionals subject to these requirements will need to carry out an assessment regarding compliance with the aforementioned.
Entities subject to the supervision of the CSSF must complete the next annual AML/CFT risk assessment survey
By way of a press release of 28 November 2019, the CSSF has also indicated that the annual survey for the year 2019 related to the fight against money laundering and terrorist financing is launched on 3 February 2020. This survey has the purpose of collecting standardised key information concerning AML-CTF risks to which professionals are exposed and forms part of the AML-CTF risk-based supervision approach implemented by the CSSF in the last years.
Answers to the survey will need to be submitted via the CSSF’s eDesk portal within a period of 6 weeks following the launching thereof with, however, a shorter delay in the banking sector where the period is of 4 weeks.
The survey must be initiated and submitted via the eDesk portal by a member of the management body of the relevant entity. In practice, this means that this person and potential delegates create an eDesk account which requires a LuxTrust authentication. In order to avoid difficulties, persons who do not yet have an account should create such account without delay.
The content of the survey remains generally unchanged compared to the previous year.
AML-CTF conference survey results
Finally, on 5 December 2019, the CSSF has summarised the AML-CTF conference of 3 December. During this conference, the CSSF presented the results of the survey carried out in relation to the target group composed of registered AIFMs. Whilst the CSSF observed that generally registered AIFMs had a sound AML-CTF framework, there was still room for improvement in relation to certain aspects:
- there is always a beneficial owner who is necessarily a natural person;
- AML-CTF procedures should be in place and tailor-made;
- a risk-based approach should always be used;
- AML-CTF yearly trainings are mandatory and should be tailor-made to the services offered by the entities;
- the frequency of targeted financial sanctions screening should be improved;
- transactions monitoring should be performed on all investors; and
- professionals must be registered on the GoAML platform.