- Applicable Financial Sanctions laws: Which national laws bring EU Russia sanctions laws into effect? If EU sanctions laws do not apply, which do?
- Does the same framework apply to Financial Sanctions against other countries (e.g. Iran?) If so, please provide link to relevant government website listing these.
- Which agency issues “licences” permitting certain activities which would otherwise be prohibited by Financial Sanctions laws?
- Link to Consolidated List of individuals and companies subject to Financial Sanctions
- Can a breach of Financial Sanctions laws be treated as a criminal offence? Please indicate the relevant law.
- What are the penalties for a criminal breach of Financial Sanctions?
- Who investigates criminal breaches of Financial Sanctions laws?
- Are there non-criminal (e.g. administrative or civil) penalties and/or fines for a breach of Financial Sanctions?
- What are the penalties for a non-criminal breach of Financial Sanctions?
- Who investigates non-criminal breaches of Financial Sanctions laws?
- Key government guidance relating to the implementation of Financial Sanctions (e.g. FAQs)
jurisdiction
1. Applicable Financial Sanctions laws: Which national laws bring EU Russia sanctions laws into effect? If EU sanctions laws do not apply, which do?
The Luxembourg law of 19 December 2020 on the implementation of restrictive measures in financial matters, as amended (the “2020 Law”) provides for the implementation of restrictive measures in financial matters adopted against certain States, natural and legal persons, entities and groups by notably acts of the European Union in light of Russia's actions destabilising the situation in Ukraine. The 2020 Law is supplemented by the Grand-ducal Regulation of 14 November 2022.
2. Does the same framework apply to Financial Sanctions against other countries (e.g. Iran?) If so, please provide link to relevant government website listing these.
The 2020 Law implements restrictive measures adopted in financial matters against certain States, natural and legal, persons, entities and groups adopted by the United Nations Security Council, or the European Union (the “Resolutions and Acts”). It therefore pertains more broadly to financial sanctions adopted against other countries or persons and not only related to Russia.
The list of Resolutions and Acts is available on the Website of the Ministry of Finance
3. Which agency issues “licences” permitting certain activities which would otherwise be prohibited by Financial Sanctions laws?
According to the 2020 Law, the Minister for Finance is competent to exceptionally issue authorisations derogating from the prohibitions and restrictive measures imposed if the Resolutions and Acts allow such derogations and under the conditions provided
4. Link to Consolidated List of individuals and companies subject to Financial Sanctions
According to the 2020 Law, the designation of States, natural and legal persons, entities or groups appearing on a list annexed to an act of the European Union or of the United Nations and the determination of the restrictive measures in financial matters is made automatically by reference to that list and to the list under the European Union's police and judicial cooperation in criminal matters.
Lists are available on the Website of the Ministry of Finance.
5. Can a breach of Financial Sanctions laws be treated as a criminal offence? Please indicate the relevant law.
The 2020 Law provides for criminal sanctions. Furthermore, breaches of financial sanctions constitute a predicate offence to money laundering pursuant to the Luxembourg
6. What are the penalties for a criminal breach of Financial Sanctions?
The 2020 Law states that, without prejudice to the application of the more severe penalties provided for, where applicable, by other legal provisions, failure to comply with the restrictive measures adopted via a grand-ducal regulation or with via an act of the European Union or United Nations in this respect is punished by imprisonment of eight days to five years and/or a fine of between EUR 12 500 and EUR 5 000 000. Where the offence has resulted in substantial financial gain, the fine may be increased to four times the amount of the offence.
7. Who investigates criminal breaches of Financial Sanctions laws?
The Luxembourg criminal competent authorities (i.e. State Prosecutor) would be in charge of investigating criminal breaches of Financial Sanctions laws.
8. Are there non-criminal (e.g. administrative or civil) penalties and/or fines for a breach of Financial Sanctions?
Competent authorities in charge of supervising compliance by relevant professionals of their legal and regulatory obligations have the ability of levying administrative sanctions for breach of i.a. financial sanctions.
9. What are the penalties for a non-criminal breach of Financial Sanctions?
Sanctions vary depending on the type of entity responsible for the breach of financial sanctions obligations. However, generally, administrative sanctions range from a fine, reprimand, warning to a temporary ban from carrying out professional activities.
10. Who investigates non-criminal breaches of Financial Sanctions laws?
The relevant competent authorities in charge of supervising the entities in scope investigate non-criminal breaches of financial sanctions laws.
11. Key government guidance relating to the implementation of Financial Sanctions (e.g. FAQs)
The Luxembourg Ministry of Finance has released Guides regarding international financial sanctions, notably Guidelines relating to the implementation of financial restrictive measures (sanctions) against third countries , entities or individuals, together with, i.a. templates for reporting under articles 5r and 5g of Regulation (EU) 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine.
The supervisory authority for the financial sector (Commission de Surveillance du Secteur Financier, CSSF) has published Frequently Asked Questions regarding International Financial Sanctions.
