CSSF Communication on prevention of money laundering and terrorist financing

On 29 August 2019, the CSSF issued a communication  on the relevance of money laundering and terrorist financing (“AML/CTF”) risks in prudential supervision in addition to AML/CTF supervision. The CSSF addresses this communication to credit institutions, CRR¹   investment firms, payment and e-money institutions, Luxembourg branches of regulated entities having their head office in the EEA or in a third country, and the other professionals of the financial sector (“Supervised Entities”).

With regard to its supervisory procedures, the CSSF will consider, in particular, concerns about the AML/CTF in the areas of authorisation, ongoing and prudential supervision, including any administrative measures to be undertaken (e.g. imposition of sanctions). The assessment made by the CSSF includes, among other things, the acquisition of qualifying holdings, the evaluation of the risk management systems and controls implemented by the Supervised Entities, and the suitability of the Supervised Entities’ shareholders and management bodies, examining their good repute and their sufficient knowledge, skills and experience to perform their duties regarding the AML/CFT obligations.

The CSSF also highlights the enhanced legal framework at European level (AMLD5² and CRD V³ ), and the further cooperation and information exchange with foreign prudential AML/TF supervisors and the European Central Bank. Supervised entities are reminded at all times to give due consideration to AML/CTF risks and ensure that their governance and risk management arrangements are appropriate and enable them to identify, assess and manage all risks to which they are (or may be) exposed.