AML/CFT

On 1 July 2024, the CSSF issued the second version of the FAQ on the AML/CFT Summary Report RC (the “SRRC Update”). Changes have been introduced to the initial version released on 29 February 2024 to improve clarity and enhance compliance with AML/CFT obligations under Circular CSSF 24/854. Below is a summary of the key changes:

The SRRC Update results in the addition of new questions addressing several topics, as follows:

• clarification of exemptions for CSSF-supervised funds that appoint both non-Luxembourg and Luxembourg IFMs. If a Luxembourg IFM is providing UCI administrator services, the entity may be exempted from the Circular CSSF 24/854;
• confirmation that Luxembourg funds labelled as ELTIF fall within the scope of the Circular CSSF 24/854;
• confirmation that an investment fund supervised by the CSSF for AML/CFT purposes having designated a Luxembourg IFM must prepare the report prepared by the compliance officer (responsable du contrôle du respect des obligations – RC);
• explanation that the SRRC replaces the former RC report that was previously required annually;
• explanation that the annual AML/CFT Risk Assessment is now included in the SRRC and no longer needs to be submitted separately;
• introduction of the concept of “sample testing” as a document-based review of AML/CFT due diligence files.

Moreover, a question has been amended to require reporting of all relevant findings from the RC, internal audits presented to the board of directors or statutory auditor reports (e.g., management letters).

On 2 July 2024, the CSSF issued the updated version of the annex of Circular CSSF 22/822 relating to high-risk jurisdictions on which enhanced due diligence and, where appropriate, countermeasures are imposed and jurisdictions under increased monitoring of the FATF (the “Annex”).

The Annex mentioned several changes. Monaco and Venezuela have been added to the FATF's increased monitoring process. Concerns are raised about weapons of mass destruction proliferation in Democratic People's Republic of Korea and terrorist financing risks in Iran. Moreover, the Annex mentions a new deadline of October 2024 for FATF to reconsider imposing countermeasures to Myanmar in case it does not make progress to address its deficiency, which has been requested since February 2020.