The Luxembourg Financial Intelligence Unit (Cellule de renseignement financier, or CRF) reported receiving 44,519 reports related to financial transactions or suspicious activities concerning money laundering and terrorist financing in 2023, a decrease from , according to the agency’s annual report in late July 2024. The CRF plays a crucial role in Luxembourg’s anti-money laundering (AML) and counter terrorist financing (CTF) efforts by analysing these reports to detect and prevent financial crime.
The reduction in reported cases was primarily attributed to a decline in e-commerce-related suspicious activities. Specifically, the number of e-commerce suspicious activity reports without transaction details (STRE) fell from 30,287 in 2022 to 23,610 in 2023. Similarly, e-commerce suspicious activity reports with transaction volumes (SARE) dropped from 11,881 in 2022 to 8,291 in 2023. In contrast, traditional reporting categories saw a slight increase, with suspicious activity reports (SAR) rising from 6,260 in 2022 to 6,953 in 2023, and suspicious transaction reports (STR) increasing from 4,611 in 2022 to 5,442 in 2023.
To address suspicions of terrorist financing, the CRF implements two specific report types: one involving transactions (TFTR) and one without transactions (TFAR). The number of reports related to terrorist financing remained relatively stable, increasing marginally from 220 in 2022 to 223 in 2023. This stability was influenced by Luxembourg’s international financial exposure and the presence of online payment and electronic money institutions serving global clients.
In terms of cross-border reporting, the CRF managed 27,609 exchanges in 2023. The main recipients of these reports were Germany, with 7,391 reports, France with 4,236, Italy with 3,276, and Spain with 1,383. The CRF also engaged in 1,936 standard exchanges with EU member state financial intelligence units in 2023, including those in France (462), Belgium (315), Germany (304), Italy (127) and Spain (114). This extensive cooperation highlighted the importance of information sharing for effective international financial crime prevention. Additionally, the CRF contributed to 40 active investigations with Europol in 2023, up from 22 in 2022.
Operational challenges and responses
The complexity of reports increased in 2023, said the CRF, largely due to heightened sensitivity from professionals under the 2004 law towards autonomous money laundering cases. To address these challenges, the CRF enhanced its analytical capabilities by hiring highly specialised financial analysts and incorporating advanced tools such as goAML for handling complex analyses.
The CRF also advanced its digital transformation efforts by exploring new technologies and artificial intelligence to improve data analysis. This technological progress was essential for identifying and tackling sophisticated money laundering networks, emphasised the agency
In response to international developments, including restrictive measures against Russia following its invasion of Ukraine and attacks in Israel in October 2023, the CRF adapted by joining international action groups. This approach aimed to better understand and manage the financing of entities linked to these global events.
Transaction blockings
Since the CRF operates solely on suspicions of money laundering or terrorist financing, the identification of a primary offence remains provisional. The CRF has the authority to “block” financial transactions, which typically precedes a judicial seizure or allows additional time for case analysis. In 2023, the CRF blocked €609.4m across 153 infractions, compared to €180.2m in 2022 across 93 such cases. Most of these blocks were related to the international financial sector, enabling relevant foreign authorities to request judicial seizure of the funds through formal mutual legal assistance requests. In other instances, national investigations into autonomous money laundering were initiated. The 2023 figures are in all likelihood “out of the ordinary,” due to two cases where the blocked amounts were “exceptionally elevated,” said the report.
Looking forward, the CRF remains focused on improving the quality and quantity of information received from professionals subject to the 2004 law. This includes active participation in international meetings and training to stay updated on the latest money laundering and terrorist financing typologies.
By leveraging advanced analytical tools and fostering international collaboration, the CRF aims to maintain a robust response to money laundering and terrorist financing, ensuring that Luxembourg’s financial system remains secure and compliant with global standards, noted the annual report.