Money laundering watchdog delays Lux inspection


Luxembourg was fully compliant with just one FATF indicator in its last evaluation in 2010 (Photo: Shutterstock) 

The Financial Action Task Force, an intergovernmental anti-money laundering monitor, has delayed its visit to Luxembourg for an inspection for a second time because of the coronavirus pandemic. 

Meetings scheduled for June and July 2020 were pushed back to March 2021 in the early stages of the pandemic last year. However, with travel restrictions and some lockdown measures still in place, FATF has now announced it would further delay the on-site visit.

This is likely to impact the publication of the group’s report on Luxembourg anti-money laundering and terrorist financing compliance. The task force is an initiative of the Organisation for Economic Co-operation and Development.

The report’s findings were supposed to be discussed during a February 2021 OECD plenary, which was then postponed until October 2021. During the February plenary a new timetable for the inspection will be discussed, the finance ministry said in a statement published on 27 January.

Luxembourg’s last full anti-money laundering evaluation dates back to 2010, when the country was found to be fully compliant with just one out of 40 indicators. FATF gave it an overall score of three on a scale of one, being the best, to four.

A 2014 follow-up report said that Luxembourg had improved regulation and compliance in several areas. The justice and finance ministries have since the first report set up a joint committee on the prevention of money laundering and the financing of terrorism.

Luxembourg has in the meantime also fully transposed the EU’s fourth anti-money laundering directive. The European Commission in 2018 had referred Luxembourg, along with 21 other EU countries, to the European Court of Justice for failing to meet the June 2017 deadline to implement the directive.

The grand duchy has over the past months issued several risk assessments on money laundering and terrorist financing risk linked, for example, to virtual currencies as part of recommendations by FATF.