CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in Luxembourg

Reporting obligations arise in respect of money laundering (“ML”), terrorist financing (“TF”)

Any suspicious transactions, including attempted transactions, must be reported, regardless of the value. A transaction is suspicious when a professional knows, suspects or has reasonable grounds to suspect that ML, an associated predicate offence or TF is being committed or has been committed or attempted.

Furthermore, the Criminal Code provides for a broad definition of ML as it refers to numerous specific offences including e.g. bankruptcy, breach of trust, corruption, environmental offences, tax evasion, bribery, market abuse (inter alia suspicious order and transactions) and any other offences punishable by imprisonment sentence of a minimum of at least 6 months.

From a ML/TF perspective, any persons or entities falling within the scope of anti-money laundering and counter terrorist financing (“AML/CTF”) obligations (inter alia financial entities, investment funds, real estate agents and developers, persons trading in goods) or any director, officer or employee of such person or entity, is obliged to inform without delay, on their own initiative, the financial intelligence unit (“FIU”). In addition, copy of this communication shall be provided to the relevant supervisory authority, where required. In practice, the money laundering reporting officer is in charge of such reporting at the level of the relevant professional.

From a ML/TF perspective, criminal sanctions may be imposed for violations of professional obligations, particularly about the reporting of suspicious operations. Knowingly contravening with the obligation to file a suspicious activities report or to respond to a request for information issued by the FIU is punishable by a criminal fine, ranging from EUR 12,500 to EUR 5,000,000.

The supervisory and sanctioning powers of the supervisory authorities, and more recently those of the self-regulatory bodies, have been considerably extended in recent years. These authorities can impose a whole range of sanctions and other measures in case of non-compliance with professional obligations set out under the AML/CTF law. Measures include warnings, reprimands, pecuniary fines, temporary or definitive prohibitions from carrying out business activities. Sanctions are made public by supervisory authorities such as the CSSF.

The identity of the professionals, managers and employees who made a suspicious operation report or who provided information to the FIU, remain confidential, unless disclosure is essential to ensure the regularity of legal proceedings or to establish proof of the facts forming the basis of these proceedings.

No civil, criminal or administrative proceedings may be brought against the professional in case of a bona fide suspicious operation report to the Luxembourg authorities responsible for ML/FT. Reports, information and documents supplied to the FIU cannot be used against the professional in case of legal action for breach of professional obligations.