Workshop on AMLR Article 75: Laying the Foundations for the Next Level of AML Partnerships in Luxembourg

Key Takeaways from the Workshop

The workshop, attended by some 70 leading representatives of the AML/CFT community in Luxembourg, provided clarity on private sector preferences and expectations, while highlighting potential features of a future operational PPP in Luxembourg.

Participants enhanced their understanding of a forthcoming operational PPP in light of the new framework created by Article 75 AMLR, paving the way for the next level of cooperation between the financial sector and authorities.

Survey Insights: Strong Support for an Operational PPP

A survey conducted jointly by the ABBL and ALFI prior to this event unequivocally underscores the necessity for legislative advancements to enhance the legal certainty needed for market participants, while ensuring a coordinated and effective response to fraud and AML risks within Luxembourg’s regulatory framework.

The results clearly indicate that a vast majority of local obliged entities are in favour of implementing a Public-Private Partnership (PPP) in alignment with Article 75 AMLR. Furthermore, nearly two-thirds of respondents expressed a preference for a model that integrates both vertical and peer-to-peer cooperation between competent authorities and obliged entities, ensuring a streamlined and multifaceted approach to financial crime prevention.

Additionally, a predominant share of the obliged entities surveyed acknowledged the added value of this PPP framework in addressing specific risks associated with predicate offences related to money laundering, such as corruption, politically exposed persons (PEPs), sanctions evasion, proliferation financing, terrorist financing, tax-related offences, and fraudulent schemes.

Key Challenges and Next Steps

The implementation of this project in the future will require addressing the key concerns identified by the obliged entities. The most important one is the need for legal certainty, calling for a well-defined regulatory framework that clarifies the scope, responsibilities, and limitations of information-sharing within the PPP.

Obviously, data protection was a key concern as well, highlighting the importance of the right balance between their own obligations towards their customers, their obligations under GDPR such as the lawfulness of data sharing, and the respect of the proportionality and necessity principles in information-sharing.

Beyond legal concerns, implementation costs were also raised, particularly by smaller entities, stressing the need for a cost-effective and resource-efficient model, and ultimately, a framework that seamlessly integrates into existing AML compliance systems. Finally, obliged entities emphasised the importance of exchanging best practices and supported a cooperation model to share knowledge, case studies, and lessons learned to enhance AML and counter-terrorist financing efforts.