EU takes Luxembourg to court over AML noncompliance

Monday 14 June 2021 11:17 CET | News

The European Commission has taken Luxembourg to court, asking the European Court of Justice (ECJ) to impose a daily penalty on the country for failing to follow EU AML regulations.


The European Commission started infringement procedure against Luxembourg in 2016 over late adoption of EU rules

Without the rules on the freezing and confiscation of proceeds of crime, EU and national law enforcement authorities are unable to stop the proceeds from crime from flowing into the legitimate economy, the Commission said. It is also harder for the EU to recover profits from organised crime. 

The rules that the Commission claims Luxembourg has failed to implement were ‘a crucial tool to break criminals' business models and combat organised crime,’ the Commission said in a press release.

Luxembourg conceded it was late with the implementation of the rules, because of the health crisis and the particular complexity of the task, as the justice ministry said. The deadline for EU countries to introduce the measures into national law passed in October 2016. Brussels launched an infringement procedure against Luxembourg the following month. To date, the Grand Duchy had not notified the Commission the so-called transposition was complete, the EC said.

The EU is able to freeze only about 2% of criminal proceeds and confiscate just 1% confiscated in the EU, meaning that criminal gangs can often keep their cash, continuing to finance criminal activities and infiltrate the economy.

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Keywords: European Commission, AML, fraud prevention, money laundering
Categories: Fraud & Financial Crime
Countries: Europe
This article is part of category

Fraud & Financial Crime

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