Money-laundering

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Introduction

Financial crime destabilizes economies and damages the integrity and reputation of the financial sector.

Money laundering and terrorist financing are two of the main components of financial crime.

Money laundering consists in putting back into the legal circuit money whose origin is illicit, even criminal, such as organised crime, drug trafficking, arms trafficking, art trafficking, exploitation of prostitution, and aggravated tax fraud.

Terrorist financing is the provision or collection of funds with the intent that they be used or in the knowledge that they will be used to commit or attempt to commit acts of terrorism.

The amended law of November 12, 2004 on the fight against money laundering and terrorist financing lists and describes in detail the obligations of professionals in the fight against money laundering and terrorist financing.

The insurance industry

With regard to insurance, life insurance and credit/guarantee activities are covered by the aforementioned law. Professionals practising these branches of insurance are thus subject to strict professional obligations, in particular with regard to knowledge and identification of their clients as well as constant vigilance throughout the business relationship. Failure to comply with these professional obligations may result in heavy financial penalties and even criminal sanctions.

By virtue of its legal mission, the Commissariat aux Assurances (caa.lu), the supervisory authority of the insurance sector, is responsible for ensuring compliance with professional obligations in the area of anti-money laundering and combating the financing of terrorism by all natural and legal persons under its supervision. The CAA has issued regulation and circulars on this matter.

The Financial Intelligence Unit (CRF) is part of the Luxembourg Economic and Financial Prosecution Service. Its mission is to receive suspicious transaction reports from professionals in the field of money laundering and terrorist financing, to analyse them and to transmit them, if necessary, to the national prosecution authorities or to foreign counterparts.

ACA Working Group

ACA’s AML Working Group (WG) brings together all the insurance/reinsurance companies subject to money laundering and terrorist financing legislation with a common objective: to deal with all the issues and themes relating to money laundering and terrorist financing. The work within this WG also allows for the elaboration of “best practices” in the fight against money laundering and terrorist financing. For example, it has established a list of potential indicators of suspicion for the primary offence of aggravated tax evasion or tax fraud.