AML predicate offense of aggravated tax fraud and tax swindle: how to detect and assess tax fraud indicators?

• Members of the boards of directors and executive boards of banks, financial-sector professionals, insurance companies and Luxembourg UCI management companies
• Internal auditors, compliance officers and risk managers
• Distributors and transfer agents of Luxembourg UCIs
• Domiciliation agents
• Leaders and team members of front offices of financial-sector professionals
• All employees of financial institutions

Following the entry into force of the Law of 23 December 2016, which amended (among others) Article 506-1 of the Criminal Code, and the CSSF circular 17/650, professionals subject to requirements regarding the fight against money laundering (AML) and terrorism financing must now take into consideration predicate criminal tax offences when carrying out their professional duties, in particular client due diligence and cooperating with the authorities.

Among other things, all these changes have led to questions such as:

• How should professionals apply this obligation to existing business relationships?
• Does it affect non-resident taxpayers?
• How does it impact professionals of internal organisational structures?

By the end of this training, participants will be able to:

• detect the negative indicators of aggravated tax fraud or tax swindle;
• identify the impacts of the due diligence obligations;
• list the risks and penalties of breaching the requirements.

1. Overview of the new regulations

• Analysis of the impacts that the CSSF circular 17/650 will have on assessing the risks of money laundering and terrorism financing
• Explanation and practical examples of the indicators listed in appendix 1 of the circular

2. Due diligence obligations

• How to note suspicions in the internal control system
• What due diligence obligations to apply to avoid dealing with funds derived from tax evasion

3. Penalties

• What are the penalties of failing to adhere to the regulations?
• Who is affected by the regulations?

4. Practical cases

• Case study adapted to the industry

This training will be coordinated by Pierre Kirsch, Partner at PwC Luxembourg.

Pierre Kirsch is a partner in the Luxembourg financial services tax practice with over 30 years of experience serving clients in banking, insurance, and asset management. He leads a team specialising in tax compliance analysis for onboarding banking clients and investors into complex alternative fund structures. Pierre and his team advise financial sector actors in Luxembourg and internationally, helping clients review onboarding and tax reporting processes, implement controls, and define organisational roles. He contributed to establishing PwC Regulated Solutions S.à r.l., managing daily operations, and supports PwC’s financial services clients with consulting and reporting on operational taxes including FATCA, CRS, QI, and CbCR.