Anti-Money Laundering: New Primary Offences And Procedures

With effect from 1 January 2017, the Law of 23 December 2016 relating to the implementation of the 2017 tax reform has included aggravated tax evasion (fraude fiscale aggravée) and tax fraud (escroquerie fiscale) (or attempts to commit such offences) as criminal tax offences constituting primary offences (infractions primaires) of money laundering under Article 506-1 of the Luxembourg Criminal Code. This means that the re-investment of the proceeds resulting from criminal tax offences committed as from 1 January 2017 constitutes a money-laundering offence under the Law of 12 November 2004 relating to the fight against money laundering and financing of terrorism ("AML Law").

In this context, the Luxembourg financial supervisory authority (Commission de Surveillance du Secteur Financier ("CSSF")) issued Circular CSSF 17/650 on 17 February 2017 for the attention of all professionals of the financial sector supervised by the CSSF. The Circular has been prepared by the CSSF together with the financial intelligence unit established at the public prosecutor's office ("CRF") and gives specific details on the practical application of the rules by professionals of the financial sector and providing also a list of situations and circumstances that may be indicators of tax related offence.

The Circular does not amend existing regulations but emphasises that professionals of the financial sector have to adapt their due diligence measures with respect to these new primary offences in tax matters, irrespective of whether the customers are Luxembourg tax resident or not.

It should be noted that the CRF has issued two new guidelines, effective as from 1 January 2017, for the attention of all...