POLITICS & INSTITUTIONS - JUSTICE

AML procedures

Money laundering: Bar Association keeps up pressure



The Luxembourg Bar Association has praised the seriousness of its members in the fight against money laundering. Photo: Romain Gamba / Maison Moderne

The Luxembourg Bar Association has praised the seriousness of its members in the fight against money laundering. Photo: Romain Gamba / Maison Moderne

The Luxembourg Bar Association has praised the seriousness of Luxembourg lawyers in the fight against money laundering and terrorist financing.

Valérie Dupong, President of the Luxembourg Bar, presented the first report of the Luxembourg Bar Control Commission (CCBL), which monitors compliance with anti-money laundering and anti-terrorist financing rules among the 3,094 lawyers who are members of the Bar.

Created in July 2020 and chaired by François Prum, the CCBL has carried out 35 onsite checks on 35 law firms since 15 September. These 35 firms total 877 lawyers, i.e. nearly 30% of all lawyers registered with the Bar.

In addition to having lawyers complete the anti-money laundering (AML) control questionnaire, the CCBL has been active. After one year of activity and monitoring, five disciplinary proceedings were opened after onsite AML checks. One of the cases was closed, but the other four resulted in disciplinary proceedings that were referred to the Administrative Disciplinary Board. As the proceedings are still ongoing, the Bar Association has not relayed any further details.

This first exercise was deemed satisfactory by the CCBL and the Bar. “We were able to get to know our members and the activities of the firms better,” said Dupong. “We can see, for example, that contrary to what we thought, domiciliation activities were not so widespread among our colleagues.”

Indeed, the annual survey of the CCBL shows that the “provision of services to companies and trusts”, a risky activity in terms of MLA, represents only 4.4% of the activities carried out by members of the Luxembourg Bar. In fact, law firms specialising in this area have delegated this task to other companies which are regulated and supervised by the CSSF and therefore fall outside the scope of the Bar and the CCBL.

Compared to a country like France, where I was told that the Paris Bar has 30,000 lawyers and only three suspicious transaction reports were made… This shows the seriousness of lawyers in Luxembourg.
Valérie Dupong

Valérie DupongpresidentLuxembourg Bar

Although it is never pleasant to undergo an inspection, Prum emphasises that members are beginning “to understand the value of the CCBL’s actions and often show themselves to be cooperative”, while reminding us that the president of the Bar has the possibility of banging her fist on the table against recalcitrant lawyers during inspections. “Out of 35 inspections, the Bar Association intervened only once by sending an injunction forcing a lawyer to cooperate,” said the former president of the Bar.

Another reason for satisfaction was the number of suspicious transaction reports sent to the Financial Intelligence Unit (FIU), with 106 reports last year, of which 88 were for suspicious activities and 18 for suspicious transactions, as well as one suspicious transaction report linked to terrorist financing without a transaction.

“We are really at the forefront in this matter. Compared to a country like France, where I was told that the Paris Bar has 30,000 lawyers and only three suspicious transaction reports were made… This shows the seriousness of lawyers in Luxembourg and reflects the Bar’s prevention and training work on this subject,” said Dupong.

The Luxembourg Bar Association furthermore provides law firms, especially smaller ones, with screening tools to enable lawyers to carry out basic research on AML procedures.

This article was originally published in Paperjam. It has been translated and edited for Delano.