The fight against money laundering, terrorist financing and corruption

Sovereign Order n°7065 was published on 3 August 2018, and integrated into earlier Order n°2318 implementing Act n°1362, amended, on the fight against money laundering, terrorist financing and corruption (see our news item dated 7 July 2018).

The latest text contains a number of new definitions of concepts such as “electronic money”, “correspondent banking”, “legal entity”, “group of insurance undertakings”, or “exclusive control” by an undertaking. As announced by the National Council, the notion of a “group” of undertakings is also defined, indirectly, by a number of criteria set out in Article 48 of the Order.

The method by which clients must be identified and their identity verified is set out, for natural persons, legal persons and legal entities. Regarding the identification of beneficial owners, the text goes into more detail and requires obliged institutions to obtain information on the date on which the person became beneficial owner, and the nature of the control exercised over the company or group concerned by the beneficial owner.

Finally, the new provisions of Article 47 and 48 of the Sovereign Order set out the framework governing certain exchanges of data within groups. However, the text does not specify which sorts of information might be concerned by the description “information [...] necessary for the organisation of measures to combat money laundering and terrorist financing”. This notion is therefore likely to be subject to broad interpretation. Nonetheless, such exchanges of information must in all cases be clearly intended for anti-money laundering purposes, and must also be documented, or else banking secrecy may be breached. The Order does expressly state that the recipient of such information is bound by professional secrecy.  

CMS can help you to ensure that you are fully compliant with your anti-money laundering obligations.