On 28 March 2022 the CSSF published frequently ask questions (the “FAQs”) in relation to the annual completion and transmission of the fight against money laundering and terrorist financing compliance officer’s summary report (the “AML/CFT RC report”) as defined in Article 42 (6) and 42 (7) of the CSSF Regulation 12-02.
As a reminder, every Luxembourg investment fund and Luxembourg investment fund manager supervised by the CSSF for AML/CFT purposes (respectively the “Fund” and the “IFM”) is legally required to appoint, both a responsible person for compliance ( “responsable du respect des obligations” (the “RR”)) and a compliance officer (“responsable du contrôle du respect des obligations” (the “RC”)).
The FAQs include the following topics:
Entities that must file the AML/CFT RC report
The present FAQs are of interest for all Funds and IFMs. FAQs specify that, if the entity is dissolved and placed into non-judicial liquidation, the AML/CFT RC reports are no longer required after the start date of the non-judicial liquidation. The liquidator remains responsible for AML/CFT compliance during the liquidation.
Formalities to file the AML/CFT RC report
The AML/CFT RC report shall be filed within five months following the end of the professional’s financial year via:
- e-file communication platform or Sofie communication platform for entities subject to CSSF Circular 19/708 (i.e: the undertakings for collective investment as defined in Circular 19/708, the securitisation undertakings subject to the Law of 22 March 2004, the pension funds subject to the 2005 Law, the SICARs and the Luxembourg investment fund managers as defined in Circular 19/708);
- eDesk module “Demandes Génériques” with the specific mention “AML/CFT RC report”, for registered AIFMs.
Form of the AML/CFT RC report
The AML/CFT RC report shall be (i) dated and signed by the RC and (ii) submitted to the CSSF by the RR.
The FAQs list the elements to state in the AML/CFT RC report and specify that the AML/CFT RC report shall be a consistent and accurate description of the work performed by the RC and of the related findings. In this respect, the AML/CFT RC report:
- shall include quantitative results; that means, for the section regarding the investors: the number of newly accepted or rejected investors for the reference period, as well as the total number of investors in the shareholder register, the type of initial and ongoing due diligences performed on the investors, as for example an enhanced due diligence on higher risk investors, and the investors' file review frequency based on its risk scoring.
- shall provide information of a qualitative nature to explain the assessment by the RC of all the work performed.
- shall include the information of “no findings”, if the inquiries and diligences conducted by the RC raised no shortcomings.
Extent of the RC’s liability irrespective of his/her nomination date
If the recently appointed RC identifies that:
- the outgoing RC did not file the annual AML/CFT RC report, the CSSF expects the incoming RC to ensure that the AML/CFT RC report is submitted to the CSSF;
- no AML/CFT due diligence has been performed by the exiting RC, the CSSF expects the board of the entity to submit a letter to explain the situation and the oversight performed by the board / RR on the work of the leaving/exiting RC.
CSSF sanctions for non-submission of the AML/CFT RC report
Professionals who would not provide the AML/CFT RC report can be subject to sanctions as detailed in Article 8-4 of the AML Law of 12 November 2004 as amended including administrative sanctions and administrative measures such as: a warning; a reprimand; a public statement which identifies the natural or legal person and the nature of the breach; a temporary ban, for a period not exceeding 5 years, to exercise a professional activity of the financial sector, to carry out one or several transactions or to exercise managerial functions; maximum administrative fines of twice the amount of the benefit derived from the breach, where that benefit can be determined, or EUR 1,000,000 at the most.