AML/CFT
AED issues January 2026 newsletter on AML/CFT obligations for RAIFs and AIFs
The AED, in its capacity as supervisory authority, has issued a newsletter aimed at raising awareness in relation to certain financial vehicles subject to the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended (AML/CFT Law), in particular Reserved Alternative Investment Funds (RAIFs) and Alternative Investment Funds (AIFs). The newsletter provides an overview of the current landscape, highlights key reporting deficiencies identified in 2024 and reiterates the main obligations of such entities to cooperate with the AED.
The AED highlights continued AML/CFT weaknesses among RAIFs and AIFs, noting major delays and reportedly high rejection rates (close to 90%) in 2024 questionnaires due to missing or incorrect identification data and recurring errors in reports filed by compliance officers (RC reports).
RAIFs and AIFs are reminded of their legal obligation to fully cooperate, including timely submissions, accurate information, immediate notification of changes, and availability of documents for inspection. Incomplete questionnaires are deemed null and void.
For 2026, AML/CFT questionnaires must be submitted by separate email, RAIF invitations were expected to be issued in February 2026, and AIF reporting will occur only upon invitation from the AED.
The newsletter also refers to Circular No. 792 quater on AML/CFT identification, which replaces Circular No. 792 ter. The former reiterates that professionals must identify and verify their clients (whether natural persons, legal persons or legal arrangements) using reliable and independent sources and proportionate, risk-based measures. It also confirms that foreign identification documents may be accepted in their original language, subject to translation at the AED’s request, and clarifies the distinction between verification by the professional and separate authentication by an independent authority in enhanced due diligence cases.
EBA and AMLA complete handover of AML/CFT mandates
On 1 January 2026, the European Banking Authority (EBA) and the Authority for Anti‑Money Laundering and Countering the Financing of Terrorism (AMLA) completed the full transfer of AML/CFT mandates from the EBA to AMLA. This transition brings to an end the EBA’s stand‑alone AML/CFT mandate, established in 2020, and establishes AMLA as the central authority within an integrated European AML/CFT supervisory system.
AMLA now receives all relevant supervisory tools and assets previously managed by the EBA, including the EuReCa database, supervisory insights and risk assessments. All existing EBA AML/CFT guidelines and technical standards will remain applicable until AMLA issues updated versions, providing regulatory continuity for financial institutions, fund managers and other obliged entities.
AMLA will assume an expanded mandate, including direct supervision of 40 high‑risk, cross‑border financial institutions or groups, development of the EU’s Single Rulebook for AML/CFT, and coordination of national Financial Intelligence Units (FIUs) to strengthen cross‑border intelligence sharing. The EBA will continue to address money laundering risks within its prudential role and will cooperate closely with AMLA to maintain a coherent supervisory framework.
CSSF publishes updated Annex to Circular 22/822 reflecting February 2026 FATF lists
On 17 February 2026, the CSSF published an updated version of the Annex to Circular CSSF 22/822, integrating the most recent Financial Action Task Force (FATF) statements on jurisdictions with strategic deficiencies in anti-money laundering, counter‑terrorist financing and counter‑proliferation financing regimes. The Annex confirms that the Democratic People’s Republic of Korea (DPRK), Iran and Myanmar remain classified as high‑risk jurisdictions subject to a call for action, requiring enhanced due diligence and, in certain cases, counter‑measures.
For Iran, the FATF reiterates its October 2025 call for the application of effective counter‑measures, including prohibitions on establishing subsidiaries, branches or representative offices of Iranian financial institutions and virtual asset service providers, restrictions on business relationships and financial or virtual‑asset transactions, and mandatory risk‑based reviews of correspondent banking relationships. Luxembourg professionals must also ensure reinforced reporting mechanisms to the FIU and notify the CSSF where relevant third‑party reliance or correspondent relationships involve Iranian entities.
Regarding Myanmar, the FATF notes the continued lack of progress in addressing its action plan and maintains the requirement to apply proportionate enhanced due diligence. The FATF indicates that counter‑measures may be considered after June 2026 absent further remediation.
Regarding the DPRK, the FATF maintains its longstanding call for the full application of counter‑measures, including terminating correspondent banking relationships, restricting financial transactions with DPRK persons and ensuring heightened scrutiny of all business relationships to address ongoing proliferation financing risks.
The Annex also reiterates obligations expected from Luxembourg professionals, including increased frequency and depth of controls, careful monitoring of transaction patterns, and mandatory FIU reporting. Professionals must continue integrating these updated FATF assessments into their AML/CFT frameworks and onboarding processes, particularly when dealing with investors, distributors, counterparties or service providers with connections to the jurisdictions concerned.