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Luxembourg Regulator Issues Fines After Panama Papers Probe

by Ulrika Lomas, Tax-News.com, Brussels

03 January 2018


The Luxembourg financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), has fined several financial institutions for failing to adhere to anti-money laundering (AML) laws following an investigation which began after the publication of the Panama Papers.

The CSSF announced last month that it issued fines totaling just over EUR2m (USD2.4m) to nine supervised entities, including four banks, after uncovering several examples of "medium or even severe breaches" of Luxembourg's AML and Combating the Financing of Terrorism Laws. Several other firms received injunctions as a result of less severe breaches of the laws, but "immediately" brought themselves into compliance, the CSSF said.

The regulatory actions stem from a comprehensive review of corporate accounts which was launched by the CSSF following the publication of the Panama Papers in April 2016. Initially, this review covered the banking sector and related to "offshore structures," but was broadened in 2017 to include investment firms and other entities in the finance sector.

Specifically, the review concentrated on adherence with due diligence procedures with regards to offshore accounts, including know your customer and know your transactions rules.

While the review uncovered a range of shortcomings with the relevant AML/CFT laws, a large majority of supervised entities were nevertheless found to be in compliance with these legal requirements.

"All these verifications showed that adherence to Luxembourg laws and regulations applicable to them at the relevant moments in time was the norm for a large majority of supervised entities reviewed," the CSSF said.

However, the regulator intends to remain vigilant and to "firmly" enforce anti-money laundering laws in the future.

"The CSSF will continue to firmly request and enforce the principle that Luxembourg banks, investment firms, and other professionals in the financial sector thoroughly follow the professional obligations in the future, specifically with regards to the prevention of money laundering (including all elements relating to newly introduced primary offences) and will draw the appropriate consequences if they fail to do so, as was the case in the past," it said.

TAGS: compliance | tax | investment | tax compliance | tax avoidance | law | banking | Luxembourg | offshore | professionals | regulation | Panama

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