Credit: FATF

Luxembourg's Ministry of Justice and the Ministry of Finance has announced that as part of the fourth round of mutual evaluations, the Financial Action Task Force (FATF) is carrying out an evaluation of Luxembourg.

The FATF is an intergovernmental body that develops international standards in the fight against money laundering, the financing of terrorism and the proliferation of weapons of mass destruction (Anti-Money Laundering/Combating the Financing of Terrorism - AML/CFT) and promotes the application of effective legislative, regulatory and operational measures in this regard. Mutual evaluations enable the FATF to monitor the implementation of these standards in member countries and to assess the overall effectiveness of their AML/CFT systems. The scope of the assessments includes two interrelated components:

  • The assessment of technical compliance covers the obligations contained in each of the 40 FATF recommendations, in particular those relating to the legal and institutional framework of the country and the powers and procedures of the competent authorities.
  • The effectiveness assessment looks at the entire AML/CFT system of the country and how it operates in order to achieve “immediate results”.

The mutual evaluation process consists of different stages:

  • The first stage consists in the selection of the experts forming the evaluation team;
  • Assessed country provides all necessary laws and regulations for technical compliance assessment;
  • The evaluators carry out the analysis of the technical compliance of the evaluated country based on the laws and regulations provided;
  • The evaluators identify the areas that deserve increased or reduced attention during the on-site visit;
  • The evaluators travel to the country. During the on-site visit, the assessment team should examine the level of effectiveness of the country against the set of defined results. To this end, they meet with public and private sector actors;
  • A mutual evaluation report covering both technical compliance and effectiveness is drafted;
  • At the FATF Plenary in June 2023, the results, including ratings and recommended actions, are discussed and the final report is adopted;
  • The final report including an in-depth analysis and recommendations for the country to strengthen its AML/CFT measures is published

In this case, the coordination of the exercise is ensured by the “Fight against money laundering and against the financing of terrorism” Department of the Ministry of Justice.

During the review process, countries are not permitted to communicate details of an ongoing review. Indeed, the confidentiality requirements apply both to the country assessed, to the assessment team, to the FATF secretariat and to all the countries of the FATF global network.