On 30 September 2025, the CSSF published an updated version of its Frequently Asked Questions (FAQ) on international financial sanctions. This update replaces the previous version dated March 2022 and substantially expands the FAQ to reflect the current regulatory framework applicable in Luxembourg.
The revised FAQ provides detailed guidance for professionals under CSSF supervision on how to implement and comply with the law of 19 December 2020 (the “2020 Law”) on restrictive measures in financial matters, the Grand-Ducal Regulation of 14 November 2022, and CSSF Regulation 12-02, as amended.
Main changes compared to the 2022 version
Expanded scope and structure
The FAQ now includes:
- 17 questions (previously 12) covering new topics such as indirect ownership, control below the 50% threshold, the treatment of homonyms, and the meaning of “without delay” when applying restrictive measures.
- New references to the Grand-ducal Regulation (question 1).
The CSSF now expressly includes the Grand-Ducal Regulation of 14 November 2022 as part of the applicable framework.
Clarified publication sources (question 2)
The CSSF now refers to both its own “Financial Crime” and “War in Ukraine” sections, as well as the Ministry of Finance’s official portal, as the main official sources for sanctions-related documentation.
Clarification on consolidated lists (question 8)
The FAQ reiterates that no consolidated list exists at national level and refers to the CSSF’s thematic sections, which provide access to the consolidated sanctions lists maintained by the European Union and the United Nations, as already set out in the CSSF’s AML/CFT FAQ.
Integration of the FIU reporting obligation (question 9)
The FAQ explicitly clarifies that any suspicion of money laundering, terrorist financing, or circumvention of financial sanctions (including attempted circumvention) must be reported without delay to the Luxembourg Financial Intelligence Unit (FIU) via the goAML platform, in line with Article 5(1)(a) of the Law of 12 November 2004 on the fight against money laundering and terrorist financing.
New reporting duties for credit institutions (question 12)
The FAQ introduces an explicit obligation for credit institutions to copy the CSSF on their annual reports to the Ministry of Finance regarding deposits exceeding EUR 100,000 held by sanctioned persons or entities subject to financial restrictive measures, under Articles 5g of Regulation (EU) No 833/2014 and 1z of Regulation (EU) No 765/2006. This clarification is grounded in Article 33(2) of CSSF Regulation 12-02 and Article 1 of the Grand-Ducal Regulation of 14 November 2022, which both require professionals to inform the competent authorities without delay and to send a copy of such notifications to the CSSF.
Independent reporting by all professionals in a contractual chain (question 13)
The FAQ confirms that when several professionals (e.g. depositary, transfer agent, intermediary) are contractually linked in the same operation, each remains individually responsible for reporting cases of financial restrictive measures to the Ministry of Finance and simultaneously copying the CSSF, even if another party in the chain has already done so. This approach ensures that both authorities receive complete and consistent information and enables the CSSF to assess the sector’s overall compliance. Professionals are also expected to maintain adequate internal policies and procedures to identify and manage situations subject to financial restrictive measures.
Application of restrictive measures below 50% ownership (question 14)
The FAQ clarifies that financial restrictive measures under Regulations (EU) No 269/2014, 833/2014 and 765/2006 may apply even where a sanctioned person holds less than 50% of an entity’s shares, provided there is sufficient evidence that the person exercises control over the entity or its beneficial owner. The CSSF refers to the European Commission’s consolidated FAQ, which recognises that control may also be established through de facto influence rather than shareholding alone. This approach was further confirmed by the General Court of the European Union (T-1106/23, 29 January 2025), which held that indicators such as veto rights, appointment powers or other contractual mechanisms may demonstrate effective control. In practice, this means that financial sector professionals must go beyond a simple shareholding analysis and assess whether a sanctioned person has the ability to influence or direct the entity, even with a minority stake.
Indirect ownership by sanctioned persons (question 15)
The FAQ confirms that financial restrictive measures also apply where a sanctioned individual or entity holds, directly or indirectly, more than 50% of the ownership or control in another entity. Such entities are to be treated as frozen assets, and the full set of EU restrictive measures applies. This clarification aims to prevent circumvention through intermediaries or layered ownership structures. Financial professionals are therefore required to perform enhanced due diligence on ownership and control chains to identify any indirect links with sanctioned persons and to apply the corresponding freezing, reporting, and notification obligations to the Ministry of Finance and the CSSF.
Handling of homonyms (question 16)
The FAQ provides guidance on cases where a client shares the same or a similar name as a listed person under UN, EU or national sanctions. Professionals must not rely solely on identical names to conclude a match but should conduct thorough due diligence to verify the client’s identity, including checks of date and place of birth, nationality, address, and other distinguishing elements. In case of doubt, professionals are required to contact the Ministry of Finance and suspend any transactions until the situation is clarified.
Meaning of “without delay” (question 17)
The FAQ provides a detailed interpretation of the term “without delay” in the context of financial restrictive measures. It confirms that professionals are required to identify and apply such measures as soon as a relevant State, person, entity, or asset has been detected. According to the Ministry of Finance’s guidelines, the term should be understood as ideally within a few hours of a United Nations designation, in order to prevent any movement or dissipation of funds subject to EU restrictive measures.
In line with United Nations Security Council Resolution 1373 (2001), the obligation also applies where there are reasonable grounds to suspect or believe that a person or entity is involved in terrorism or terrorist financing.
The same requirement applies to notifications to the Ministry of Finance and the CSSF under Article 33(2) of CSSF Regulation 12-02. Professionals should therefore ensure that their internal procedures and escalation mechanisms enable the detection, freezing, and reporting of relevant assets without delay, in accordance with Article 33(3) of the same Regulation.
The updated FAQ provides clearer operational guidance to professionals under CSSF supervision and reinforces the expectation that financial restrictive measures be implemented and reported without delay. It also confirms the close coordination between the CSSF and the Ministry of Finance in the monitoring and enforcement of international financial sanctions.
Share on
