FATF, a dreaded guest

It is this week (22–25 February), at the end of the plenary session of the members of the Financial Action Task Force (FATF), that the Grand Duchy will be set on the date of its evaluation. Scheduled for October 2020, postponed to March 2021 due to the Covid-19 pandemic, the visit has been postponed again for the same reasons and "will be rescheduled by the FATF plenary as soon as possible", FATF president said on 27 January.

This offers a few weeks of respite for the many actors in the market who will have to answer for their actions. Luxembourg is playing a big part in this evaluation. During the last evaluation by the FATF in 2010, it received a “partially compliant” assessment, in other words a yellow card, especially since the Organisation for Economic Co-operation and Development (OECD) had placed the Grand Duchy on its grey list for the exchange of tax information.

FATF’s report then severely criticised the shortcomings in the fight against money laundering and terrorist financing: absence of a prior risk assessment, insufficient on-the-spot controls by Luxemburg’s Financial Supervisory Authority (CSSF, French: Commission de surveillance du secteur financier), absence of a register of the beneficial owners of companies, uncontrolled use of bearer shares, lack of legal proceedings at both national and international level, etc. “One of the shortcomings detected was also a too informal national coordination”, recalls Michel Turk, appointed “Mister FATF” in 2018 who is attached to the Ministry of Justice.