Print Article

Luxembourg AML systems are they good enough for FATF?


Luxembourg's financial systems have a checkered history.

  1. A September 2020 update of its national risk assessment of money laundering and terrorist financing indicated ongoing threats posed by cross-border proceeds of corruption and tax evasion.
  2. Luxembourg has fallen foul of European laws this year. In June 2021, the European Commission referred Luxembourg to the European Court of Justice for failing to transpose EU rules on seizing criminals' profits.
  3. The IMF's 2021 Luxembourg report stated:
  4. And the OpenLux investigation, conducted by Le Monde along with ten media partners for more than a year, labelled lux as a tax haven

OpenLux fallout 

  1. Then there was the OpenLuxwhich revealed that the names of children or deceased people were being listed in the LBR as the Ultimate Business Owner (UBO) of companies.
  2. Since its inception in 2019, the LBR has had a critical flaw that only allows searches by company name or registration number rather than owner's name.
  3. While this has made it difficult to link a corporate entity to those who profit from it, French newspaper Le Monde (along with ten media partners) spent a year scraping the registry's website and obtained 3.3 million documents covering over 124,000 companies registered in Luxembourg.
  4. Whether the new draft bill will tackle the many issues revealed by OpenLux, including its finding that
    • "Almost half of the companies, funds, and foundations registered in Luxembourg have no real, identifiable beneficiaries to date,"
    • And make the LBR more open and searchable, remains to be seen.

Time for action

  1. Following these events, it is taking steps toward tightening its AML systems, with new legislation aimed at sanctioning money laundering and tax evasion.
  2. While the details are still being confirmed, a new draft bill from the Ministry of Justice will enable the Luxembourg Business Register (LBR) to impose administrative sanctions and could include steps such as requesting non-Luxembourg residents to provide ID when registering a business.
  3. The effectiveness of the bill remains to be seen. Requesting ID would initially be voluntary – which may still leave room for exploitation – and until the details are confirmed, it's unclear exactly how stringent the bill will be.

How does Luxembourg conform with European Union legislation?

  1. In June, the latest version of the European Union's anti-money laundering directive, 6AMLD, was implemented across Europe. It's unclear if Luxembourg is failing to meet these standards, but it previously struggled to enforce elements of 4AMLD in 2018.
  2. The Financial Action Task Force (FATF) is due to complete its subsequent mutual evaluation of the country later this year, which will be a crucial milestone for its AML/CFT practices.

Be careful?

  1. It also remains to be seen how changes to Luxembourg's new draft bill will sit with the EU Anti-Money Laundering Authority, due to be set up by 2024, and if they will reflect its recent lessons learned.
  2. For compliance teams, Luxembourg's problems with its LBR are a reminder to be careful.
  3. If using this register or any other business register, teams should be aware of potential problems and seek to verify IDs independently.

The Team

Meet the team of industry experts behind Comsure

Find out more

Latest News

Keep up to date with the very latest news from Comsure

Find out more


View our latest imagery from our news and work

Find out more


Think we can help you and your business? Chat to us today

Get In Touch

News Disclaimer

As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email