CSSF FAQ: Persons involved in AML/CTF for investment funds/managers

On 25 November 2019, the CSSF issued an FAQ on persons involved in AML/CTF for a Luxembourg fund or investment fund manager (“IFM”) supervised by the CSSF for AML/CTF purposes. The aim of the FAQ, which is currently composed of two questions, is to share the CSSF’s interpretation of Article 4(1) of the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended ("AML Law"). 

While the FAQ is only applicable to entities subject to the CSSF’s supervision, unregulated funds may nevertheless wish to take its provisions into account since they are subject to the AML Law as well. 

In Question 1 of its FAQ, the CSSF recalls that in its view, every Luxembourg fund and IFM subject to AML/CTF supervision is legally required to appoint:

1. - a person from among the members of their management bodies, to be responsible for compliance with AML/CTF obligations, in French a “responsable du respect des obligations”  (“RR”); and
2. - a compliance officer at the appropriate hierarchical level to ensure the control of compliance with AML/CTF obligations, in French a “responsable du contrôle du respect des obligations” (“RC”).

In practice, the CSSF expects that any Luxembourg regulated fund designates:

1. - one of its governing body’s members or the governing body (e.g. board of directors) in its entirety as RR (as a collegial and ultimate management body, it is in any case responsible for AML/CTF matters); and
2. - a member of the governing body or a third-party appointee (e.g. from the staff of the IFM of the fund) as RC who will be in charge of the day-to-day AML/CTF tasks. In cases where the RC is a third-party appointee, the CSSF provides additional guidance on the formalisation of the contractual relationship with the RC. In addition, the CSSF clarifies that the RC can, in exceptional circumstances, be located abroad if the IFM of the fund is not domiciled in Luxembourg.

Similar rules apply to any Luxembourg IFM supervised by the CSSF, which must designate:

1. - its governing body (e.g. board of directors) in its entirety or one of its members as RR; and
2. - the compliance officer at the appropriate hierarchical level in charge of AML/CTF aspects as RC. Based on the outcome of the national risk assessment of money laundering and terrorist financing issued in December 2018, the CSSF seems to depart from its previous position (as detailed in point 313 of CSSF Circular 18/698), in accordance with which the need to designate the RC must be assessed in light of the size and nature of activities of the IFM.

The CSSF adds that the above rules are general rules and may need to be adapted on a case-by-case basis since they do not address all possible scenarios.

Question 2 of the FAQ clarifies the conditions applicable for any person appointed as RR or RC. These conditions are based on those defined in Article 40 of CSSF Regulation 12-02 of 14 December 2012 on AML/CTF.