CSSF Communication on prevention of money laundering and terrorist financing

Posted - 16.10.2019


Now reading : 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.

  • 1.CRR” refers to Capital Requirements Regulation, i.e. Regulation (EU) 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms.
  • 2.AMLD5” refers to Directive (EU) 2018/843 of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLD4).
  • 3.CRD V” refers to Directive (EU) 2019/878 of 20 May 2019 amending the Capital Requirements Directive IV as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures.

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