European Union: Back To 2018 – Forward To 2019

Last Updated: 12 December 2018
Article by Arendt & Medernach

Banking & Financial Services

Anti-Money Laundering

The Luxembourg legal framework relating to AML/CTF has been substantially reshaped during 2018 with the implementation into Luxembourg law of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (4th AML Directive). Such implementation is about to be achieved and has been divided into the following seven pieces of legislation:

  • the law of 23 December 2016 relating to the tax reform which introduced enhanced tax fraud and tax swindle as a new predicate offence to money laundering,
  • the law of 13 February 2018 which has substantially amended the law of 12 November 2004 on AML/CTF (Read more...),
  • the law of 1 August 2018 on the access to AML/CTF related information by the national tax authorities,
  • the law of 10 August 2018 on information to be obtained and retained by fiduciary agents (Read more...),
  • the law of 10 August 2018 on the organisation and cooperation of the Financial Intelligence Unit,
  • bill of law 7216B on the register of beneficial ownership in fiduciary arrangements (still under discussion), and
  • bill of law 7217 on the register of beneficial ownership of Luxembourg legal entities arrangements (still under discussion) Read more...

In addition, amendments are expected to be made to CSSF Regulation 12-02 and to the Grand-Ducal regulation of 1 February 2010 in the months to come.

This new legislation is further completed by the risk factor guidelines issued by the ESAs (ESMA, EIOPA and EBA). These guidelines were adopted in Luxembourg via CSSF Circular 17/661 and entered into force on 26 June 2018. In this context the EU Commission also adopted a Delegated Regulation on high risk third countries which has already been amended.

The ESAs Joint Committee has also issued an opinion on the use of innovative solutions in the customer due diligence process as regards the remote verification of customers' identities entailing new risks regarding AML/CTF.

It is worth highlighting that the 4th AML Directive was recently amended by Directive (EU) 2018/843 (5th AML Directive), which must be implemented by Member States before 10 January 2020. The changes introduced by the 5th AML Directive to the registers of beneficial owners have already been, at least partially, reflected in bill of law 7217. Read more...

Furthermore, additional European legislation has recently been published in the Official Journal of the EU: (i) Directive (EU) 2018/1673 on combating money laundering by criminal law which establishes minimum rules concerning the definition of criminal offences and sanctions in the area of money laundering must be implemented by Member States by 3 December 2020, (ii) Regulation (EU) 2018/1672 on controls on cash entering or leaving the Union will apply from 3 June 2021, and (iii) Regulation (EU) 2018/1805 on mutual recognition of criminal asset freezing and confiscation orders will apply from 19 December 2020.

In addition, a draft directive laying down rules facilitating the use of financial and other information for the prevention, detection, investigation or prosecution of certain criminal offences is still pending at EU level.

Finally, a new bill of law 7356 inter alia specifies the definitions of terrorist financing.


Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation will apply from 1 January 2019. In this respect, bill of law 7349 grants supervisory and sanctioning powers to Luxembourg authorities.

A proposal for a regulation creates a new type of financial instrument, the "sovereign bond-backed securities" (SBBS) and establishes a secure regime for SBBS transactions. The proposal provides rules for (i) the composition and structure of an SBBS issue, (ii) the notification and transparency requirements for the issuing entity, and (iii) the monitoring by national competent authorities.

Please refer to the section "Insurance Law".

Payment Services Directive 2 (PSD 2)

The law of 20 July 2018 on payment services (the 2018 Law) aims at implementing Directive (EU) 2015/2366 on payment services in the internal market (PSD 2) into Luxembourg law and therefore amends quite substantially the law of 10 November 2009 on payment services (LPS).

According to PSD 2, the 2018 Law pursues the overall objective of ensuring access to the market for new product service providers adapting rules to new and innovative technologies while enhancing the protection of consumers. In this respect, it sets out two new categories of service providers: (i) payment initiation service providers (PISPs) and (ii) account information service providers (AISPs) which are required to obtain authorisation from the Minister of Finance before carrying out their activities and fall within the scope of certain obligations such as set out under the 2018 Law (e.g. information requirements and rules pertaining to data access). As an example of rules which have led to the enhancement of consumer protection, the LPS provides for a new unconditional right to refund for direct debits in relation to non- authorised payment transactions where the payment was initiated by a PISP.

Ranking of unsecured debt instruments in insolvency hierarchy

The law of 25 July 2018 implements Directive (EU) 2017/2399 on the ranking of unsecured debt instruments in insolvency hierarchy into Luxembourg law. It sets forth the debt instruments with lower priority than the claims of unsecured creditors in the event of insolvency and requires the Commission de Surveillance du Secteur Financier (CSSF) to deliver a certificate in the event of establishment of branches in another Member State by a Luxembourg financial institution.

Inactive accounts

A new bill of law 7348 aims at setting out a legal framework regarding inactive bank accounts, safe-deposit boxes and unclaimed insurance policies and provides for specific professional requirements which banks and insurance companies will be subject to in relation thereto. It covers three main pillars, i.e. (i) the prevention and, where necessary, the monitoring of the inactivity of bank accounts, safe-deposit boxes and unclaimed insurance policies through information and research procedures, (ii) the deposit of unclaimed assets at the Luxembourg consignment office (Caisse de consignation) after a fixed time period of inactivity or escheat, and (iii) the restitution of the assets deposited at the Luxembourg consignment office.

The Commissariat aux Assurances (CAA) and the Commission de Surveillance du Secteur Financier (CSSF) are entrusted with supervisory and sanctioning powers for non-compliance with the requirements provided for under bill of law 7348.

To view the full article, please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions