MoU between Luxembourg and Monaco regarding the fight against money laundering and the financing of terrorism

Enhanced cooperation on the field

The fight against financial crime does not stop at the border of a country. Indeed, most often, criminals put in place complex schemes at international level to cover up their operations. MoUs between national competent authorities in this respect are thus indispensable to fight even more effectively against this reality. “We have a keen interest in collaborating”, emphasises Claude Marx. “Our financial centres are very similar. Our two countries have a strong international outlook. We have also a reputation to defend. “

Michel Hunault also highlights the need for international cooperation: “The European Union has just decided to set up an authority dedicated to the fight against money laundering and the financing of terrorism. Because there are loopholes, shortfalls and we see that harmonising the legislation alone does not make all the difference. Cooperation between us is essential.”

This MoU is thus along the same lines as other agreements (general agreements or specifically dedicated to AML/CFT) concluded by the CSSF with its counterparts abroad, in Europe or in third countries. In practice, these bilateral or multilateral agreements mainly enable the implementation of practical protocols to facilitate and make the exchanges of information, the cooperation and mutual assistance between competent authorities more efficient. They also help ensuring a better coordination within the framework of cross-border supervision, in particular with respect to Luxembourg entities operating in the co-signatory country or vice-versa.

Strict approach to AML/CFT

Luxembourg has developed and pursued, for many years, a strict policy regarding the fight against money laundering and the financing of terrorism. At international level, most rules in this respect were initiated some 30 years ago, in particular on the initiative of the FATF, and have since continually been updated, whether at international, European or national level in order to constantly adapt to the emergence of new ML/TF risks and new AML/CFT challenges.  This was the case, for example, of virtual asset providers which have been subject to the Luxembourg AML/CFT framework and the CSSF’s supervision for that purpose since March 2020.

“Cryptocurrencies are added to what we already have to supervise”, specifies Claude Marx. “We have taken a first step by requiring that all players operating in cryptocurrencies register with a supervisory authority so that we have an overview of their activities, even if they are not, strictly speaking, regulated. Crypto/fiat currencies exchange platforms, for example, must request an authorisation as payment institution and are thus subject to the CSSF’s supervision. “

Recent developments in the AML/CFT field include the adoption by the European Commission, on 20 July 2021, of a whole AML Package with text proposals specifying, inter alia, the professional AML/CFT obligations as well as the organisation of the future European AML/CFT authority and its supervisory powers.

The Commission de Surveillance du Secteur Financier

The Commission de Surveillance du Secteur Financier (CSSF) is a public institution which supervises the professionals and products of the Luxembourg financial sector. It supervises, regulates, authorises, informs, and, where appropriate, carries out on-site inspections and issues sanctions. Moreover, it is in charge of promoting transparency, simplicity and fairness in the markets of financial products and services and is responsible for the enforcement of laws relating to financial consumer protection and the fight against money laundering and terrorist financing.

The CSSF carries out its prudential supervision and supervision of the markets in order to contribute to the solidity and stability of the financial sector exclusively in the public interest.

The CSSF is under the authority of the Ministry of Finance but has financial autonomy and autonomy of action as required by the highest international organisations. It has a total workforce of 950 highly qualified agents.

Press contact: presse@cssf.lu