AED ¦ RAIFs and AIFs in Luxembourg – AED’s January 2026 Newsletter Signals Persistent AML/CFT Shortcomings

Overview of the AED’s findings and why RAIFs and AIFs must improve cooperation

The Registration Duties, Estates and VAT Authority (AED) published a January 2026 newsletter focused on the AML/CFT supervision of Reserved Alternative Investment Funds (RAIFs) and Alternative Investment Funds (AIFs). The newsletter highlights important quantitative and qualitative failings observed in the 2024 reporting cycle and reiterates the legal duty of these vehicles and their managers to cooperate fully with Luxembourg authorities. The findings point to recurring operational weaknesses that increase regulatory risk for funds and their service providers and warrant immediate remedial action.

Size and scope of the supervised population

At the end of 2025 the AED supervised approximately 3,200 RAIFs for AML/CFT purposes and expects that over 8,000 AIFs may fall within the same supervisory scope. Given these volumes, the AED is preparing draft guidance to clarify the definition and scope of AIFs in close cooperation with professional associations. The scale of the supervised population underlines why consistent and accurate reporting is essential for effective AML/CFT oversight and for demonstrating the industry’s commitment to compliance.

Key reporting shortfalls observed in 2024

The AED identified two interrelated problems: late or missing submissions and poor data quality. A significant share of RAIFs and AIFs did not comply with the AED’s deadlines for the 2024 AML/CFT questionnaires and the annual RC reports. Where questionnaires were submitted, almost 90% were rejected because of missing or incorrect data, with the majority of errors concentrated in “Section 1 – Identification”. Common defects in RC reports included missing signatures, incorrect or absent RCS numbers, and non-compliant file naming. These errors are not clerical details only; they impair the authority’s ability to assess risk, to communicate effectively with the fund, and to maintain accurate supervisory records.

Bastian Schwind-Wagner _Follow

"The AED’s January 2026 newsletter highlights systemic weaknesses in RAIF and AIF AML/CFT reporting, with high rejection rates driven by missing identification data and procedural errors. These shortcomings increase supervisory risk and require immediate improvements in data quality and submission processes.

Fund managers and service providers should prioritise centralised controls, pre-submission reviews, and up-to-date records of authorised signatories and RCS numbers. Following the AED’s procedural guidance and using the designated email channels will reduce rejections and strengthen overall AML/CFT compliance."

What the obligation to cooperate requires in practice

Under Article 5 of the AML/CFT Law, professionals, their directors and employees are obliged to cooperate fully with Luxembourg authorities.

For RAIFs and AIFs that means:

• timely transmission of questionnaires, RC reports and legal documentation;
• providing accurate, complete and up-to-date information;
• promptly reporting any material change such as liquidation, changes to the responsible contact persons, or changes to legal names; and
• ensuring documents are available during on-desk or on-site inspections.

The AED also makes clear that incomplete or inaccurate questionnaires will be treated as null and void, which effectively forces resubmission and delays regulatory clearance. Cooperation is not optional: poor responsiveness or incomplete filings expose funds and their managers to supervisory escalation and potential enforcement consequences.

Operational guidance and procedural changes for 2026

To address recurring problems, the AED set out practical instructions for the 2026 campaigns. AML/CFT questionnaires for RAIFs and AIFs must be submitted by separate email without other attachments or file types. Invitations for the 2026 RAIF campaign are scheduled to be dispatched in February; AIF questionnaires are to be submitted only upon invitation by the AED. The AED also published a new Circular No. 792 quater on AML/CFT identification which replaces the previous Circular No. 792 ter (dated 28 July 2025). Two dedicated email addresses have been established to streamline communications: aed.raif@en.etat.lu and aed.aif@en.etat.lu. The AED strongly advises professionals to monitor the AED website for updates and campaign communications.

Implications for fund managers, governance and compliance teams

The AED’s analysis demonstrates that many compliance failures stem from process weaknesses: inadequate onboarding and identity documentation, poor internal controls around data accuracy, insufficient governance over who completes and signs regulatory returns, and failures in record-keeping. Fund managers, appointed representatives, and delegated administrators should review and strengthen their controls over statutory reporting and communications with supervisors.

Practical steps include:

• centralising responsibility for questionnaire completion;
• implementing checklist-driven quality reviews before submission;
• maintaining a current register of RCS numbers and authorised signatories; and
• ensuring backup procedures for timely transmission when staff turnover occurs.

These measures reduce the risk of rejected filings and avoid supervisory follow-up.

Why this matters for AML/CFT effectiveness

Accurate and timely reporting is the foundation of AML/CFT supervision. When identification fields are incomplete or key documentation is missing, supervisory authorities cannot assess risk exposures, detect suspicious trends, or prioritise inspections and enforcement. For the funds themselves, persistent reporting failures can trigger deeper scrutiny that disrupts operations, increases compliance costs and damages reputation. In a jurisdiction where cross-border investors and asset managers expect high standards, systematic shortcomings undermine market trust.

Conclusion and immediate actions to take

The AED’s January 2026 newsletter is a clear signal: RAIFs and AIFs must improve both timeliness and quality of AML/CFT submissions. Funds and their service providers should treat the AED’s guidance and procedural requirements as mandatory compliance controls rather than administrative formalities. Immediate actions include auditing current reporting processes, implementing pre-submission quality control steps, updating contact and signatory records, and ensuring all future filings follow the AED’s format and delivery instructions. To avoid the common mistakes that led to a high rejection rate in the 2024 round, it is important to regularly consult the AED website and use the designated email channels for RAIFs and AIFs.

Dive deeper

• AED ¦ Nouveauté: Newsletter à l’attention des FIA et FIAR ¦ Link