Luxembourg Draft Law 7467 partly transposing Directive (EU) 2018/843 (AMLD V)

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Luxembourg Draft Law 7467 partly transposing Directive (EU) 2018/843 (AMLD V)

19 August 2019

Regulatory News Alert

Context and objectives

On 8 August 2019, Draft Law 7467 transposing certain provisions of the fifth Anti-Money Laundering Directive (AMLD V) was presented to the Luxembourg Chamber of Deputies.

The Draft Law was approved by the Council of Luxembourg in the government meeting held on 26 July 2019, where the Council announced that the transposition of AMLD V is one of the government's priorities.

The purpose of this Draft Law is to make necessary adaptations in the amended Law of 12 November 2004 on the fight against money laundering and the financing of terrorism, as well as other laws transposing the main provisions of AMLD V at national level. Hence, texts proposed to be amended by the draft law include:

  • The amended Law of 12 November 2004 on the fight against money laundering and the financing of terrorism
  • The amended Law of 9 December 1976 on the organization of the notarial profession
  • The amended Law of 4 December 1990 on the organization of the bailiff service
  • The amended Law of 10 August 1991 on the profession of a lawyer
  • The amended Law of 10 June 1999 on the organization of the profession of chartered accountant
  • The amended Law of 23 July 2016 relating to the audit profession.
     
Key elements of the draft law

With the objective to transpose certain provisions of AMLD V into the Law of 12 November 2004, as amended, and by taking into account the level of precision of the Financial Action Task Force (FATF) Recommendations, the Draft Law focuses mainly on the following elements:
 

  • The prevention of risks associated with the use of virtual currencies

AMLD V extends the scope of Directive (EU) 2015/849 (AMLD IV) so as to include service providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers. Hence, for the purposes of anti-money laundering and countering the financing of terrorism, competent authorities should be able, through obliged entities, to monitor the use of virtual currencies. The amendments also intend to limit the use of prepaid cards.
 

  • Strengthening and harmonization of the treatment of the “high-risk third countries”

The Draft Law, in line with AMLD V requirements, aims to strengthen and harmonize the treatment of third countries identified as “high-risk countries” by the European Commission. Therefore, when dealing with such high-risk cases where business relationships or transactions exist, the Draft Law requires obliged entities to apply enhanced due diligence measures to manage and mitigate those risks. Furthermore, the Draft Law requires obliged entities to apply additional mitigating measures regarding high-risk third countries by taking into account recommendations expressed by the FATF, especially in cases where these recommendations are not the subject of equivalent provisions in the EU Directives.
 

  • Strengthening the means of the supervisory authorities to cooperate with their counterparties

The Draft Law introduces further harmonization of the role of different supervisory authorities and self-regulatory bodies, whose powers are currently only partly harmonized and aligned. Considering the importance of cross-border activities in Luxembourg, the Draft Law aims to strengthen the international cooperation between supervised authorities by proposing a legal framework in accordance with the principles established by the AMLD V and the FATF Recommendations in this regard. The purpose is to align the professional obligations and the powers of the competent authorities.

 

How can Deloitte help?

In this ever evolving regulatory landscape, Deloitte can help you stay ahead of the game with our Kaleidoscope Regulatory Watch services, which monitors and analyzes upcoming changes.

Deloitte’s AML/CTF advisory specialists and dedicated services will also help you design and implement your renewed business strategy in light of the future evolution of the AML/CFT framework.

Key Deloitte AML services:

  • AML/KYC remediation plan
  • AML/CTF training
  • AML/CTF policy, procedure, and process design or review
  • DKYC: externalizing KYC processes
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Contacts

Pascal Eber
Partner – Operations Excellence & Human Capital
Tel : +352 45145 2649
peber@deloitte.lu

Eric Collard
Partner – Forensic & AML, Restructuring
Tel : +352 45145 4985
ecollard@deloitte.lu

Simon Ramos
Partner – IM Advisory & Consulting
Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Jean-Philippe Peters
Partner – Risk Advisory
Tel : +352 45145 2276
jppeters@deloitte.lu

Bastien Collette
Director – Advisory & Consulting (AML/CTF)
Tel : +352 45145 3372
bacollette@deloitte.lu

Alice Lehnert
Director – Advisory & Consulting
Tel : +352 45145 2605
alehnert@deloitte.lu

Benoit Sauvage
Director – RegWatch, Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Regulatory & Consulting
Tel : +352 45145 2311
mvuksic@deloitte.lu

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