Amendments To Anti-Money Laundering Legislation

The Luxembourg Law of 13 February 2018 ("Amending Law"), which entered into force on 18 February 2018, introduces amendments to, among others, the Luxembourg Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended ("2004 Law").

The Amending Law partially transposes Directives 2015/849 ("4th AML Directive"), inter alia aiming at aligning the European regulatory framework with the decisions taken by the Financial Action Task Force (FATF) in 2012. The qualification of certain tax crimes as predicate offences falling within the scope of the 2004 Law, as provided for by the 4th AML Directive, became effective as from 1 January 2017 (please see our Newsletter May 2017).

It should be noted that the provisions of the 4th AML Directive regarding the implementation of a register of beneficial owners and a register of trusts are not covered by the Amending Law but are treated separately in two other bills of law: Bill of Law 7217 (register of beneficial owners) and Bill of Law 7216 (register of trusts).

Key changes arising from the Amending Law are as follows:

Amended definition of beneficial owner of corporate entities and trusts The Amending Law changes the approach regarding the determination of beneficial ownership.

(i) In the case of corporate entities, the formerly existing ownership threshold of more than 25% is now merely construed as an indication, i.e. depending on the circumstances, a natural person holding less (or more) than 25% may have to be considered as beneficial owner. The concept of beneficial owner will also include - to the extent all possible means having been exhausted and provided there are no grounds for suspicion - where a beneficial owner cannot positively be identified, the senior managing person(s) of the professional.

(ii) For trusts and similar arrangements, it is now provided that all participants to the arrangement, being the settlor, the trustee, the protector (if any), the beneficiaries and any such other natural person exercising ultimate control over the trust (by means of direct or indirect ownership or by other means), must be identified. In this specific case the previously existing threshold of at least 25% for beneficiaries of trusts is no longer applicable.

Setting of different thresholds with respect to the carrying out of customer due diligence measures The threshold triggering the obligation to carry out customer due diligence measures of EUR 15,000 for occasional...

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