The events of September 11, 2001 have given a new sense to the fight against money laundering and the financing of terrorism.
A European Directive 2001/97/EC published in the Official Journal of the Community L344 dated 28/12/2001 has defined a legal framework applicable to all States of the European Union.
The Directive has been transposed in the Luxembourgish law by the Law dated 12 November 2004 and the following modifications.
This Law, defining a legal framework for the fight against money laundering, has been completed by other legal texts regulating the professional activities of Lawyers, Notaries, Bankers, Insurers, Auditors, Chartered Accountants…particularly likely to be in contact with potential criminals.
Without entering into complex technical considerations, the new legal framework applies to the following principles:
- To know your Client : duty for the professional to identify clearly and without ambiguity all natural persons and legal entities participating in the transaction;
- To know your Client’s activities : duty for the professional to identify clearly and without ambiguity all transactions performed by his Client. The professional is obliged to constantly check the conformity between the transactions performed by his Client and the laws against money laundering and all legal provisions, in general.
- Duty to cooperate with the authorities : as a consequence, the professional needs to inform the Authorities about any fact representing an infringement to laws against money laundering.
The recent 4th Directive is in the same logic, the responsabilities of the finance sector professionals are just even more important so the procedures even more drastic.
In conclusion: the new legal provisions constitute an important part of the financial sector in Luxembourg and an updating of the existing regulations.
The Client should consider these new provisions to be a strengthening of existing regulations with the purpose to confirm the quality of the Luxembourg financial place and to preserve sound financial arrangements.
We remain available for any further details.