Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF)

Companies under an increasing pressure of regulators and ever-changing regulations

With growing pressure of regulators on Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) issues, the danger of suddenly being involved directly or indirectly in money laundering or terrorist financing affairs is increasing simultaneously. Therefore, regulatory and reputation risks often belong to the major concerns of a rising number of company Board members.

Luxembourgish law

That law of 12 November 2004 has been amended on 17 July 2008, to transpose the Third Directive on AML/ATF into national law. The main changes are:

• Broader scope of application:
  The group of persons covered by the law is further extended, now including life insurance intermediaries as well as trust and company service providers and all traders in goods for transactions in cash of 15,000 Euros and more.
• New definitions:
  The law creates a larger definition of money laundering, and introduces definitions for Politically Exposed Persons (PEP) and Beneficial Owners. It introduces more specific and detailed provisions on the identification of customers, in particular with regards to trusts, company service providers and non-listed companies.
• Introduction of a risk-based approach:
  The law introduces the so-called “risk-based approach”, whereby entities subject to AML rules are required to adapt their practices and processes to the assessed level of money laundering and financing of terrorism risks. Whereas previous directives gave relatively little detail about customer due diligence procedures and left these matters to sector guidance, the Third Directive sets out the detail of what type customer due diligence measures are to be applied depending on the related risks. Specific examples are described in the amended articles of law: quoted companies, Luxembourg public authorities, public companies, supervised entities, pension plan, correspondent banks, transactions with PEP, etc.
• Introduction of third party reliance (Art. 3-3):
  Reliance on certain defined third parties becomes possible, responsibility remains with the professional.
• Communication with the FIU:
  Credit and financial institutions need to have systems in place that enable them to respond fully and rapidly to enquiries from the anti-money laundering unit of the public prosecutor’s office ("FIU").
• Communication of suspicious cases:
  Under certain specific conditions, professionals will be authorized to communicate information on suspicious cases notified to the FIU to other professionals.

Our strategic approach: comprehensivenessis the key

Facing money laundering and terrorist financing issues is so complex that only a strategic and comprehensive approach could be successful in this respect.

The AML/ATF challenge must not be considered as a stand-alone project. It should be integrated in the company's business processes and control environment. A robust AML/ATF program must not be reduced to a sum of specific controls performed by dedicated professionals to comply with increasing legal requirements.

Our strategic approach is aiming at providing you with tangible and competitive benefits. Our in-depth AML/ATF expertise, our international and diversified professional experiences and our cross-competencies teams enable us to develop case-sensitive, individual AML/ATF solutions for our clients.

Finally, our approach does not only aim at protecting your company against the threat of money laundering and terrorism financing but also at generating long-term savings and benefits through adapted organisational structures and comprehensive data management, which can be used for a variety of purposes.

How PricewaterhouseCoopers can help:

We can help you to comply with the ever-changing regulations and to meet best practices in order to prevent money laundering and terrorist financing. We can review your processes and develop the corresponding organisational structures to support and implement your AML/ATF strategy. In this respect, we provide a broad range of expertise and experience, including:

• Assessment of your AML/ATF risk-exposure,
• Diagnostic / review / gap analysis of AML/ATF policy and procedures of your entity (or intermediaries such as funds distributors, independent clients advisors,…) to provide you with the comfort that you are compliant, or have a programme in place to become compliant, with AML and financial crime regulations,
• Assistance in AML/ATF tools pre-analysis to help you choosing the best integrated and comprehensive solution (name matching and transaction monitoring tools), based on an analysis of the specificities of your activities, law and regulation applicable to your company, size of your company, cost / efficiency ratio,…
• Finding the best way to design and improve your AML/ATF internal control system and tools (rules based engine, case management procedures, defining alert clearance and escalation procedures,…),
• Designing and implementing adequate and effective procedures,
• Review of your data management, Client Relationship Management (CRM) and Know Your Customer (KYC) systems and consideration of the necessity of remediation services,
• Design and facilitation of your AML/ATF training programme.