AML/CFT update

1. CSSF: AML/CFT External Report – Reminder on submission deadline

CSSF Circular 21/788 of 17 December 2021 introduced the obligation for In-scope Entities  to prepare, together with their approved statutory auditor acting as external AML/CFT expert, and submit, on a yearly basis, the so-called "CSSF AML/CFT External Report" ("Report"). "In-scope Entities" are (i) all Luxembourg investment fund managers (including registered AIFMs) and (ii) Luxembourg investment funds supervised by the CSSF for AML/CFT purposes (excluding Luxembourg investment funds having appointed an investment fund manager, established in Luxembourg or abroad).

In this context, the In-scope Entities are reminded that the extended deadline to submit the Report within nine months after the financial year-end (31 December) is no longer applicable. As a result, the Report for In-scope Entities having their financial year ending on 31 December 2022 had to be submitted to the CSSF by 30 June 2023.

2. AED: Updated guide for AML/CFT obligations for RAIF and other guidance for non-regulated funds

In March 2023, the Administration de l'enregistrement, des domaines et de la TVA ("AED") has released on its website an updated version of its Guide on the Professional Obligations with regard to the fight against money laundering and terrorist financing for the product reserved alternatives investment fund ("RAIF").

Compared to the previous version published in January 2023, the updated guide includes limited modifications regarding, in particular, the AML/CFT due diligence information and documentation that must be gathered in respect of the investors/beneficial owners, as follows:

• the certified social security card has been removed from the list of documents provided in case of non-face-to-face business relationship (Part 1, Section 1.1.);
• the list of information/documentation to be gathered to identify any type of investor and beneficial owner has been amended as follows (Part 1, Section 1.5.):
  • the extract from the Register of beneficial owners or, as applicable, the Register of Fiducies and Trusts has been added to the list of supporting documents;  whilst
  • the registration number has been removed as supporting information.

On a related note, for the unregulated investment funds subject to the AML/CFT supervision of the AED, practical guidance may be found on the AED's website regarding the implementation of their AML/CFT obligations, including in particular:

Technical sheet relating to the implementation of the AML/CFT risk assessment (only in French)

As requested by Article 2-2 of the Law 12 November 2004 on the fight against money laundering and terrorist financing, as amended ("AML/CFT Law"), professionals (including non-regulated investment funds) shall take appropriate steps to identify, assess and understand the risks of money laundering and terrorist financing that they face. In this context, this document provides guidance as to the methodology to develop and implement an AML/CFT risk assessment.

Technical sheet relating to the implementation of the internal AML/CFT procedure (only in French)

Pursuant to Article 4 of the AML/CFT Law, the professionals are required to implement an internal AML/CFT policy/procedure. This document details the main AML/CFT professional obligations to be reflected in the AML/CFT procedure (e.g., AML/CFT due diligence obligations, record keeping, suspicious activity/transaction reporting). For further guidance regarding the reporting of suspicious operations, please refer to the related guideline from the Financial Intelligence Unit (version 2.1 of 1 April 2021). The AED also published a guide on this topic (only in French).

Technical sheet relating to the AML/CFT risk factors to be identified within the risk assessment (only in French)

This document provides guidance as to (i) the main risk factors which should be considered in the framework of the AML/CFT risk assessment (Please refer also to the first technical sheet referred to above.), and (ii) for the situations triggering the application of enhanced due diligence.

Technical sheets relating to the alternative investment funds ("AIFs") (only in French) and the RAIFs

The documents provide details on the three pillars underpinning the AML/CFT professional obligations for non-regulated AIFs and RAIFs, namely (i) customer/investor due diligence, (ii) adequate internal management requirements (including details on the appointment of the RR/RC) and business-wide risk assessment, and (iii) requirements in terms of cooperation with the AML/CFT competent authorities.

For the avoidance of doubt, this guidance only applies to AIFs which are not otherwise subject to CSSF supervision.