CSSF Circular 18/698: Clarifications Relating To Combatting Money Laundering And Terrorist Financing

Background

With circular 18/698 of 23 August 2018 on (i) the authorisation and organisation of Luxembourg investment fund managers, and (ii) provisions on combatting money laundering and terrorist financing applicable to investment fund managers and entities carrying out the function of registrar agent (the Circular), the Commission de Surveillance du Secteur Financier (CSSF) provides clarifications and, to some extent, introduces new requirements aimed at increasing transparency in the fight against money laundering and terrorist financing.

This briefing focuses particularly on the anti-money laundering and combating the financing of terrorism (AML/CFT) provisions set out in sub-chapter 5.4 of the Circular.

By way of background, the fifth anti-money laundering Directive (EU) 2018/843 of 30 May 2018 (the 5th AML Directive) amending Directive (EU) 2015/849 of the European Parliament and the Council of 20 May 2015 (the 4th AML Directive) was published in the Official Journal of the European Union on 19 June 2018 and entered into force twenty days thereafter. Member States are required to implement the 5th AML Directive into national law by 10 January 2020.

The 4th AML Directive partly transposed into Luxembourg legislation amongst others by (i) the law of 13 February 2018 widening obligations as regards the fight against money laundering and terrorist financing for in-scope professionals and (ii) the law of 10 August 2018 on the identification of beneficial owners of trusts, both amending the law of 12 November 2004 on the fight against money laundering and terrorist financing (the AML Law). The Luxembourg AML/CFT legislative framework is complemented by other laws and regulations as well as AML/CFT circulars1 (the AML/CFT Regulations) regularly released/updated by the CSSF and addressed to professionals and entities subject to its supervision, such as the Circular.

The Circular is addressed to Luxembourg investment fund managers (hereinafter IFMs)2. Thus, both UCITS management companies and authorised AIFMs are captured. However, alternative investment fund managers subject to article 3 of the Luxembourg law of 12 July 2013 on alternative investment fund managers (the 2013 Law) and not mentioned in the list of IFMs set out in the Circular are expressly out of scope3.

It is noteworthy that certain provisions of the Circular relating to AML/CFT apply not only to IFMs but also to registrar agents.

Since the Circular entered into force on 23 August 2018 with immediate effect4, market participants captured by the Circular should, to the extent not already complied with, immediately undertake efforts to comply in full with these requirements.

Outline of AML/CFT Regulations' requirements

Sub-chapter 5.4 of the Circular clarifies the general framework and obligations to which IFMs and registrar agents are subject...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT