Fight against money laundering and terrorist financing | Amendments to the requirements for persons subject to the AML Law
Source : BSP
18 octobre, 2022 par

On 12 August 2022, the law of 29 July 2022 entered into force (hereinafter the “Law”) amending 1) the Code of criminal procedure, 2) the amended law of 8 August 2000 on international judicial assistance in criminal matters, 3) the amended law of 12 November 2004 on the fight against money laundering and terrorist financing (the “AML Law”) and 4) the amended law of 10 July 2020 on the central fiduciary and trusts register (the “RFT Law”).

The Law aims to further clarify, in a targeted manner, various legal provisions relating to the fight against money laundering and terrorist financing (“AML/CTF”) and to bring them into line with international standards on AML/CTF and the recommendations of the Financial Action Task Force ("FATF"). The Law aims to clarify certain concepts in order to make them more precise and less susceptible to interpretation.

Change to the definition of persons subject to the AML Law 

Changes are made to the definition of persons subject to the AML Law and specifically to the definition of a trust and company service provider (“Trust and Company Service Provider”). Thus, the undefined term "in a professional capacity" (à titre professionnel) is replaced by the term "by way of a business relationship" (au titre d’une relation d’affaires) which is defined by the AML Law.

Hence, a Trust and Company Service Provider is any natural or legal person who in “a business relationship” provides any of the services listed in the AML Law to third parties.

Among these services, the Trust and Company Service Provider may perform certain functions including that of “director" and “secretary” of a company. The Law adds "manager, director, member of the management board" (gérant, administrateur, membre du directoire) alongside the term “director” to clarify the functions that the Trust and Company Service Provider may also perform.

Customer due diligence and UBO identification

The professional subject to the AML Law is now under the obligation to identify both the client and the beneficial owner and to consult the register of beneficial owners ("RBO") and/or the register of trusts ("RFT") and to report to the RBO and to the RFT the existence of erroneous data, a lack of registration, modification or write-off in such registers. Professionals are also subject to this obligation in the context of the exercise of the monitoring of the business relationship.

The enhanced due diligence requirements for politically exposed persons (“PEPs”) are more closely aligned with the wording of FATF Recommendation 12 relating to PEPs. In addition to the normal customer due diligence measures professionals will be required to apply enhanced measures provided for in the AML Law with regard to PEPs, "whether the client, the person purporting to act for and on behalf of the client or the Beneficial Owner” may be regarded as PEP as defined in the AML Law. Accordingly, professionals will need to verify the identity of persons with whom they start (or are in) a business relationship.

A closer cooperation between supervisory authorities

The Law allows the supervisory authorities to request their foreign counterpart authorities to carry out an investigation or inspection in the territory of that counterpart authority under certain conditions laid down in the Law.

Amendment of the Law on the register of trusts

The Law amends the RFT Law and specifies that trustees and fiduciaries are required to notify any change to the beneficial owner to the RFT within one month.