Further specification of AML/CFT obligations

Professionals must update their AML/CFT policies and procedures to take account of recent modifications to the AML Grand-Ducal Regulation and the AML CAA Regulation and review the impact on their arrangements with delegates.

Following the recent amendment of the AML legal framework in the context of the transposition of AMLD5 (see our Newsflash on this topic), two level two regulatory texts further specifying the obligations of professionals were published:

• Grand-ducal Regulation of 14 August 2020 amending Grand-ducal Regulation of 1 February 2010 providing details on certain provisions of the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended; and
• CAA Regulation N° 20/03 of 30 July 2020 replacing and repealing the amended CAA Regulation No. 13/01 of 23 December 2013 on the fight against money laundering and terrorist financing (“AML CAA Regulation”).

A useful commentary of the changes brought to the existing regime by the AML CAA Regulation is available on the CAA website.

In addition to changes tending to align wordings and references with the latest revisions of the AML Law, other key points notably include:

• clarifications on the tasks and duties of the person responsible for AML/CFT compliance at management level and the AML/CFT compliance officer;
• reinforcement of obligations when certain AML/CFT professional obligations are outsourced (e.g. risk assessment in relation to the outsourced functions prior to the outsourcing);
• enhanced requirements in terms of formalisation of the AML/CFT procedures;
• specification of due diligence required in the event of a portfolio transfer;
• precisions on KYC information to be gathered;
• further guidance with regard to simplified and enhanced due diligence measures as well as on mitigation measures applying to non face-to-face relationships.