Fiduciary Arrangements - AML Directive - New Requirements

On 25 August 2018 the law of 10 August 2018 on the information to be obtained and held by Luxembourg fiduciary agents in relation to fiduciary arrangements (the Law) has entered into effect. It is a part of the legislative pack meant to transpose into Luxembourg law the provisions of the European anti-money laundering regulatory framework, more precisely Directive (EU) 2015/849 (the 4th AML Directive) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, as amended by the Directive (EU) 2018/843 (the 5th AML Directive).

The aforementioned fiduciary agents are obliged to maintain up to date and accurate information on beneficial owners of Luxembourg law fiduciary arrangements, for a period of five years after their involvement in such arrangements.

This information shall include the identity of the settlor, the trustee, the fiduciary agent, the protector (as the case may be), the beneficiaries (or their class, as the case may be), and any other natural person exercising effective control over the fiduciary arrangement. This information shall be provided by the fiduciary agents to (i) the Luxembourg national authorities as listed in the Law (upon request) and (ii) the professionals of the financial sector (as defined by the Luxembourg law of 12 November 2004 on the fight against money laundering and terrorist financing) when, in their capacity as fiduciary agents, they enter into a business relationship with them, or when they carry out occasional transactions which exceed the threshold of 15,000 euros.

Supervisory authorities which oversee the fulfillment of fiduciary agents' anti-money laundering obligations have been given wide investigative powers, which include: the right to access all documents in any form, the right to request information from any person (even by means of...

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