Latest publications from the CSSF on Brexit and anti-money laundering and terrorist financing related matters

In the final weeks of the year 2020, two texts pertaining respectively to Brexit and anti-money laundering and terrorist financing related matters have been published.

The first text is a Commission de Surveillance du Secteur Financier (the “CSSF”) regulation 20-09 of 14 December 2020 which amends CSSF regulation 20-02 of 29 June 2020 on the equivalence of certain third countries in terms of supervision and authorisation requirements for the purposes of providing investment services or carrying out investment activities and ancillary services by third-country firms. The list of such third countries is thus amended to include the United Kingdom as equivalent third country.

In practice, UK firms will therefore have the ability to rely on the national transitional regime set out in Article 32-1 (1) par. 2 of the law of 5 April 1993 on the financial sector, as amended in order to provide their investment services or carry out their investment and ancillary activities on a cross-border basis to eligible counterparties and professional clients per se.

The second text is a law of 19 December 2020 implementing financial restrictive measures (the “Law”), which repeals the former law of 27 October 2010 implementing United Nations Security Council resolutions as well as acts adopted by the European Union concerning prohibitions and restrictive measures in financial matters in respect of certain persons, entities and groups in the context of the combat against terrorist financing (the “2010 Law”).

In the same manner as the 2010 Law, the Law implements financial restrictive measures taken against certain States, natural or legal persons, undertakings or groups pursuant to United Nations Security Council resolutions as well as acts adopted by the European Union. However, the Law carries out several changes to the former regime and notably:

• the scope of application of the Law is further defined by reference to:
  • natural persons of Luxembourg nationality whether they reside in or operate on or from the territory of the Grand Duchy of Luxembourg or from abroad;
  • legal persons having their registered office, a permanent establishment or the main center of interests in the Grand Duchy of Luxembourg and which operate on or from the territory of the Grand Duchy of Luxembourg or from abroad;
  • branches of the Luxembourg legal persons established abroad as well as the Luxembourg branches of foreign legal persons; and
  • any other natural or legal persons which operate on the territory of the Grand Duchy of Luxembourg.
• the sanctions entailed for failure to comply with the restrictive measures adopted by virtue of the Law have been enhanced: a prison sentence of eight days to five years and a criminal fine of EUR 12.500 to 5.000.000 or only one of these sentences. When the violation has enabled the realisation of an importance financial gain, the fine may be increased to four times the amount of the offense.

If you have any questions regarding the above, please do not hesitate to contact our specialists.