16 December 2025
CHD ¦ Consequences of the February 26, 2025 Ruling on Double Jeopardy in Financial Matters
The Luxembourg Court of Appeal ruling of 26 February 2025 and its fallout for double punishment in financial crime cases
On 26 February 2025 the Luxembourg Court of Appeal handed down a decision that rekindles an old but still unsettled tension: when can the same conduct give rise to both administrative sanctions imposed by the financial regulator (CSSF) and criminal prosecution for money‑laundering and terrorist‑financing offences, without violating the non bis in idem principle? The Government’s written reply of 16 December 2025 from the Ministers of Justice and Finance to a parliamentary question clarifies how Luxembourg reads that decision in light of EU law and European human‑rights jurisprudence, and outlines the legal and operational framework intended to prevent unwanted collateral effects on criminal enforcement.
Legal background: non bis in idem under EU and ECHR law
Non bis in idem – no one shall be tried or punished twice for the same offence – is a well‑established legal principle. In the EU context it is guaranteed by Article 50 of the Charter of Fundamental Rights; the European Court of Human Rights (ECHR) applies a similar rule under Article 4 of Protocol No. 7. Both courts, however, accept that administrative and criminal sanctions may coexist provided the administrative measure does not have a penal character. Two separate but related tests drive the analysis. The Court of Justice of the EU and Luxembourg’s Conseil d’État have confirmed that Article 50 does not prohibit member states from combining administrative and criminal penalties, unless the administrative sanction is penal in nature and final. The ECHR uses the Engel triple test to determine whether an administrative measure is criminal in nature, and further allows cumulative sanctions only under three cumulative conditions: a legitimate general interest objective, complementary purposes of sanctions, coordination that limits procedural burden, and proportionality of combined severity.
What the Court of Appeal decided and how the Government reads it
The Court of Appeal applied the ECHR and CJEU principles to facts where the CSSF had already imposed an administrative sanction and criminal proceedings were later brought for infringements of Luxembourg’s anti‑money laundering law (law of 12 November 2004, as amended). The court found that, for the particular facts of that case, the cumulative application of criminal proceedings on top of a definitive administrative sanction breached the non bis in idem principle and declared the prosecution inadmissible.
The Government’s response emphasizes that the judgment is an application of settled European case law rather than a novel domestic rule. It therefore interprets the ruling narrowly: a prior administrative sanction does not automatically bar later criminal prosecution. The key question remains whether the administrative measure had a penal character and whether, taking account of the ECHR’s cumulative conditions, the procedural and substantive circumstances make a second (criminal) proceeding incompatible with non bis in idem. That assessment must be made case by case by the competent courts.
Consequences for prosecutions against firms and individuals
A central worry in the financial sector is whether a regulatory settlement or an administrative fine paid by a firm can be used by wrongdoers as a “get‑out” from criminal risk, including for the firm’s decision‑makers. The Government’s position is that, in principle, administrative sanctions for AML/CFT failures do not automatically preclude later criminal proceedings against the legal person or against responsible individuals. Whether non bis in idem applies depends on an individualized judicial analysis of identity of facts and the penal or administrative nature of the prior sanction. In short, paying an administrative fine will not per se immunize directors or compliance officers from criminal exposure where the elements of a criminal offence are met and the prior sanction was not penal in nature and/or not definitive in the sense required by EU law and ECHR case law.
Coordination mechanisms: law and practice to avoid procedural traps
To reduce the risk that an authority’s early choice of an administrative route would foreclose criminal avenues in serious cases, Luxembourg law already embeds cooperation obligations. The amended law of 12 November 2004 contains a national cooperation chapter (Title I‑1) and a provision (Art. 9‑1) organizing cooperation between supervisory authorities, self‑regulatory bodies and the Financial Intelligence Unit (CRF). The Government also highlights that Article 23 of the Code of Criminal Procedure applies where procedural coordination with the judiciary is required. The reply indicates that a mix of statutory cooperation duties and case‑by‑case judicial oversight is the current approach; forthcoming transposition of recent EU measures is expected to reinforce formal coordination mechanisms between administrative and judicial authorities.
Risk of forum shopping for administrative outcomes and preserving criminal deterrence
The Government acknowledges the practical risk that economic actors might prefer rapid administrative solutions (such as paying fines) to avoid criminal exposure. But it stresses that the formal classification of a sanction – administrative or criminal – is less important than its effectiveness, proportionality and deterrent impact. Luxembourg law still provides clear distinctions between administrative fines and criminal sanctions, applicable to both legal persons and responsible natural persons. The policy challenge highlighted in the reply is to ensure that administrative enforcement remains sufficiently robust and dissuasive and that criminal prosecution continues to be available where the elements of a criminal offence are present and where the cumulative legal‑test permits it.
Legislative developments: EU drivers and national transposition
The Government points to EU developments as a primary driver for national legislative adaptation. Article 1 (point 18) of Directive (EU) 2024/1619 addresses situations where administrative and criminal procedures target the same person for the same conduct and envisages cooperation mechanisms between competent administrative authorities and judicial authorities. Luxembourg intends to transpose those provisions into national law, providing a clearer legal framework governing overlaps between administrative enforcement by the CSSF and criminal proceedings on money‑laundering and terrorist‑financing offences. That transposition will be critical to reduce legal uncertainty and to operationalize coordination arrangements that satisfy EU and ECHR constraints while preserving effective sanctions.
Practical implications for compliance officers, boards and prosecutors
For compliance professionals and board members the ruling and the Government’s reply confirm three practical points.
First, administrative settlement remains a live enforcement option but is not an automatic shield against criminal prosecution.
Second, the exact sequencing and character of prior administrative measures matter: whether a sanction is final and whether it is classified as penal under Engel‑type criteria will influence later prosecutorial options.
Third, organizations should assume that serious AML/CFT failures can trigger parallel processes and design internal responses – document retention, cooperation with regulators and authorities, remedial steps – so as to mitigate both administrative and criminal risk.
For prosecutors and judges the decision is a reminder to apply the detailed tests from ECHR and CJEU case law when assessing non bis in idem objections: evaluate the nature of the administrative penalty, the identity of facts and elements between proceedings, the existence of complementary objectives, the procedural burden on suspects, and the proportionality of combined sanctions.
Conclusion: a case‑by‑case equilibrium that EU law demands
The 26 February 2025 Court of Appeal decision is a strict application of EU and ECHR principles on double jeopardy. It does not create a categorical immunity for administrative sanctions nor does it close the door to criminal enforcement of AML/CFT offences. Instead it reinforces that the permissibility of cumulative administrative and criminal measures requires careful, fact‑specific judicial scrutiny and robust inter‑authority coordination. Ongoing transposition of EU directives will require Luxembourg to make its cooperation mechanisms more explicit, which should reduce uncertainty – but the essential balance will remain judicially determined: administrative enforcement must be effective and dissuasive, and criminal law must remain available where the legal tests for criminal liability and the limits of non bis in idem permit it.
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