This consolidated text was drawn up by the CSSF for information purposes only. In case of

discrepancies between the French and the English consolidated texts, the texts published in the

Journal officiel du Grand-Duché de Luxembourg are the sole authoritative and universally valid

versions.

Law of 19 December 2020 on the implementation of

restrictive measures in financial matters

(Mém A 2020, No 1072)

as amended by:

-

the Law of 20 July 2022 setting up a monitoring committee for restrictives

measures in financial matters and amending:

1° Article 506-1 of the Penal Code;

2° the Law of 19 December 2020 on the implementation of restrictive

measures in financial matters

(Mém. A 2022, No 369)

We Henri, Grand-Duke of Luxembourg, Duke of Nassau,

Having heard our State Council;

With the consent of the Chambre des Députés;

Having regard to the decision of the Chambre des Députés of 17

December 2020 and that of the State Council of 19 December 2020 that

a second vote is not required;

Ordered and order:

Article 1

The object of this law is the implementation by the Grand Duchy of

Luxembourg of the restrictive measures in financial matters adopted

against certain States, natural and legal persons, entities and groups by:

1° the provisions of resolutions adopted by the United Nations Security

Council under Chapter VII of the Charter of the United Nations;

2° the following acts of the European Union:

a) common positions adopted before 1 December 2009 pursuant to

Articles 12 and 15 of the Treaty on European Union and for the

cases referred to in Articles 60(1), 301 and 308 of the Treaty

establishing the European Community;

b) decisions adopted since 1 December 2009 pursuant to Articles

25 and 29 of the Treaty on European Union and for the cases

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referred to in Articles 75, 215 and 352 of the Treaty on the

Functioning of the European Union;

c) regulations adopted before 1 December 2009 pursuant to Article

249 of the Treaty establishing the European Community or

decisions taken pursuant to such regulations and for the cases

referred to in Articles 60(1), 301 and 308 of the Treaty

establishing the European Community;

d) regulations adopted since 1 December 2009 pursuant to Article

288 of the Treaty on the Functioning of the European Union or

regulations or decisions adopted pursuant to those regulations

and for the cases referred to in Articles 75, 215 and 352 of the

Treaty on the Functioning of the European Union.

Article 2

Without prejudice to the definitions provided for in the resolutions and

acts referred to in Article 1, where applicable, the terms used in this law

shall be understood to mean:

1) "funds" means financial assets and economic advantages of any

kind, including cash, cheques, claims on money, drafts, money

orders and other payment instruments, deposits with financial

institutions or other entities, balances on accounts, debts and debt

securities, public or private debt instruments, publicly or privately

traded securities and shares and other equity securities, certificates

of title, bonds, promissory notes, warrants, unsecured securities,

derivative contracts, interest, dividends or other income or capital

gains received on assets, credit, right of set-off, guarantees,

performance bonds or other financial commitments, letters of credit,

bills of lading, sales contracts, as well as any document evidencing

an interest in a fund or financial resources, and any other instrument

of export financing;

2) "economic resources" means assets of any kind, whether tangible or

intangible, movable or immovable, which are not funds but can be

used for funds, goods or services;

3) "vital interests" means the competitive situation in relation to foreign

countries, and any situation preventing or likely to prevent damage

to the reputation of an economic sector or the economic place of the

Grand Duchy of Luxembourg;

4) "Restrictive measures in financial matters" means

1° The prohibition or restriction of financial activities of any kind;

2° The prohibition or restriction on the provision of financial

services, technical assistance, training or advice in relation to a

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State, natural or legal person, entity or group referred to in this

law; or

3° The freezing of funds, assets or other economic resources owned

or controlled, directly, indirectly or jointly, with or by a person,

entity or group referred to in this law or by a person acting on

their behalf or at their direction.

"Freezing of funds" means, for the purposes of this law, any action

to prevent any move, transfer, alteration, use of, access to, or

dealing with funds in any way that would result in any change in

their volume, amount, location, ownership, possession, character,

destination or other change that would enable the use of the funds,

including portfolio management.

"Freezing of economic resources" means, under this law, any action

intended to prevent the use of economic resources to obtain funds,

goods or services of any kind, including the selling, hiring or

mortgaging of such funds, goods or services.

5) "external security" means the security of foreign States or

international or supranational organisations with which the Grand

Duchy of Luxembourg pursues common objectives on the basis of

an international treaty;

6) "national security" means the independence and sovereignty of the

State, the security and functioning of institutions, fundamental rights

and public freedoms, the security of persons and property, the

scientific and technical potential or the economic interests of the

Grand Duchy of Luxembourg;

7) "financial services" means any service of a financial nature, including

insurance and related services and banking and other financial

services.

8) "supervisory authorities" means

a. the Commission de Surveillance du Secteur Financier referred to

in the Law of 23 December 1998 establishing a financial sector

supervisory commission (“Commission de surveillance du

secteur financier”), as amended;

b. the Commissariat aux Assurances (Insurance Supervisory

Authority) referred to in the Law of 7 December 2015 on the

insurance sector, as amended;

c. the Administration de l’enregistrement, des domaines et de la

TVA (Registration Duties, Estates and VAT Authority) referred to

in the Law of 10 August 2018 organising the Administration de

l’enregistrement, des domaines et de la TVA, as amended;

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9) "self-regulatory bodies":

a. The Institut des réviseurs d’entreprises (Institute of Statutory

Auditors) referred to in Part I, Title II of the Law of 23 July 2016

on the audit profession, as amended;

b. the Ordre des experts-comptables (Order of Chartered

Professional Accountants) referred to in Title II of the Law of 10

June 1999 on the organisation of the profession of chartered

professional accountant, as amended;

c. the Chambre des notaires (Chamber of Notaries) referred to in

Section VII of the Law of 9 December 1976 on the organisation

of the notarial profession, as amended;

d. the bar associations established by the Law of 10 August 1991

on the legal profession, as amended;

e. the Chambre des huissiers (Chamber of Court Bailiffs) referred

to in Chapter VIII of the Law of 4 December 1990 on the

organisation of the court bailiffs, as amended.

10) "Credit institution" means any credit institution within the meaning

of point (1) of Article 4(1) of Regulation (EU) No 575/2013 of the

European Parliament and of the Council of 26 June 2013 on

prudential requirements for credit institutions and investment firms

and amending Regulation (EU) No 648/2012, including its branches,

within the meaning of

point (17) of Article 4(1) of the

aforementioned Regulation (EU) No 575/2013, whether its head

office is situated in the Union or in a third country.

11) "financial institution" means

a) direct insurance undertakings and reinsurance undertakings

with a head office in the Grand Duchy of Luxembourg which

have been granted an authorisation in accordance with Article

14 of Directive 2009/138/EC of the European Parliament and of

the Council of 25 November 2009 on the taking-up and pursuit

of the business of insurance and reinsurance;

b) any investment firm within the meaning of point (1) of Article

4(1)(1) of Directive 2014/65/EU of the European Parliament and

of the Council of 15 May 2014 on markets in financial

instruments and amending Directive 2002/92/EC and Directive

2011/61/EU;

c) any undertaking for collective investment which markets its

units or shares;

d) any branch in Luxembourg of the financial institutions referred

to in letters (a) to (c), whether their registered office is situated

in a Member State of the European Union or in a third country.

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Article 3

Restrictive measures in financial matters apply to:

1) natural persons of Luxembourg nationality who reside or operate in

or from the territory of the Grand Duchy of Luxembourg or abroad;

2) legal persons having their registered office,

a

permanent

establishment or their centre of main interests on the territory of the

Grand Duchy of Luxembourg and which operate in or from the Grand

Duchy of Luxembourg or abroad;

3) branches of Luxembourg legal persons established abroad and

branches in the Grand Duchy of Luxembourg of foreign legal

persons; and

4) all other natural and legal persons operating on the territory of the

Grand Duchy of Luxembourg.

Article 4

(1) The implementing measures necessary for the implementation of

restrictive measures in financial matters shall be adopted by grand-ducal

regulation.

The grand-ducal regulation designates the States, natural and legal

persons, entities or groups that are subject to restrictive measures in

financial matters and determines which of the measures referred to in

“point (4)”¹of Article 2, apply.

The States, natural and legal persons, entities or groups referred to in

the grand-ducal regulation may be published on the website of the

Minister of Finance.

(2) By way of derogation from paragraph 1, the designation of States,

natural and legal persons, entities or groups appearing on a list annexed

to an act of the European Union or of the United Nations and the

determination of the restrictive measures in financial matters which

apply shall be made automatically by reference to that list.

This reference also applies to States, natural and legal persons, entities

or groups included in these lists under the European Union's police and

judicial cooperation in criminal matters.

Article 5

(1) A grand-ducal regulation may impose a restrictive measure against

States, natural and legal persons, entities and groups in order to ensure

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the defence of the national and external security or vital interests of the

country and pending the formal adoption of decisions within the United

Nations Organisation or the European Union.

(2) The restrictive measure shall be valid for a maximum period of sixty

days, and its effects shall automatically expire at the end of such period,

unless it is duly extended for respective periods of thirty days with

reasons.

(3) The States, natural and legal persons, entities or groups referred to

in the grand-ducal regulation referred to in paragraph 1 may be

published on the website of the Minister of Finance.

Article 6

(1) Natural and legal persons who are required to implement the

restrictive measures provided for in this law shall inform the Minister

responsible for finance of the enforcement of each restrictive measure

taken in respect of a State, natural or legal person, entity or group

designated in accordance with this law and the implementing

regulations, including attempted transactions.

For the purposes of implementing this law, the Minister responsible for

Finance is competent to deal with matters relating to the enforcement of

financial restrictive measures on the part of the natural and legal

persons, entities and groups concerned, as well as on the part of the

natural and legal persons obliged to apply them. The Minister responsible

for Finance is also competent to exceptionally issue authorisations

derogating from the prohibitions and restrictive measures imposed if the

resolutions and acts referred to in Article 1 allow such derogations and

under the conditions provided for therein.

(2) Without prejudice to the provisions of paragraph 3, the supervisory

authorities and self-regulatory bodies shall be responsible for the

supervision of the persons falling within their competence for the

purposes of the implementation of this law. To this end, the supervisory

authorities and self-regulatory bodies shall ensure effective monitoring

of the implementation of financial restrictive measures and shall take the

necessary measures to that end.

(3) The Administration de l’enregistrement, des domaines et de la TVA

is responsible for the supervision of the persons falling within its

competence exercised pursuant to point (5) of Article 1(1) of the Law of

10 August 2018 on the organisation of the Administration de

l’enregistrement, des domaines et de la TVA, as amended, for the

purposes of the implementation of this law.

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(4) The supervisory authorities have the same powers as those conferred

on them by Articles 8-2, 8-4, 8-5, 8-6, 8-7 and 8-9 of the Law of 12

November 2004 on the fight against money laundering and terrorist

financing, as amended.

(5) The competent bodies within the self-regulatory bodies have the

same powers as those attributed to them by Articles 8-2a, 8-10, 8-11,

8-12 and 8-13 of the Law of 12 November 2004 on the fight against

money laundering and terrorist financing, as amended.

Article 7

The Minister for Foreign Affairs is designated as the competent authority

to communicate to the United Nations Sanctions Committees the natural

and legal persons, entities and groups to which the restrictive measures

in financial matters apply, as well as all information relating thereto, for

the purpose of their inclusion on the United Nations Consolidated List.

Article 8

The application of the restrictive measures provided for in this law,

carried out in good faith on the grounds that such action is in conformity

with the directly applicable provisions of the European Union or the

resolutions of the Security Council of the United Nations or with this law,

shall not give rise to any liability of any kind on the part of the natural

or legal person carrying it out, its management or its employees, unless

it is established that it is the result of gross negligence.

Article 9

(1) The disclosure in good faith to the authorities referred to in Article 6

by a person, employee or director of such a person, of information

necessary for the execution of this law shall not constitute a breach of

any restriction on disclosure of information imposed by contract or by

professional secrecy and shall not involve the person, employee or

director concerned in any liability.

(2) Professional secrecy shall not prevent the exchange of information

necessary for the execution of this law between the authorities referred

to in Article 6 and the various competent national, foreign and

international authorities.

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Article 10

Without prejudice to the application of the more severe penalties

provided for, where applicable, by other legal provisions, failure to

comply with the restrictive measures “adopted by way of a grand-ducal

regulation pursuant to Article 4(1), or by way of an act by the European

Union or United Nations pursuant to Article 4(2)”²shall be punished by

imprisonment for a term of eight days to five years and a fine of between

EUR 12 500 and EUR 5 000 000 or by one of these penalties only. Where

the offence has resulted in substantial financial gain, the fine may be

increased to four times the amount of the offence.

Article 11

The Law of 27 October 2010 on the implementation of United Nations

Security Council resolutions and acts adopted by the European Union

containing prohibitions and restrictive measures in financial matters

against certain persons, entities and groups in the context of the fight

against the financing of terrorism is repealed.

We instruct and order that this law be inserted in the Official Journal of

the Grand Duchy of Luxembourg in order to be enforced and complied

with by all the persons concerned.

Commission de Surveillance du Secteur Financier

283, route d’Arlon

L-2991 Luxembourg (+352) 26 25 1-1

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Law of 20 July 2022

direction@cssf.lu

www.cssf.lu

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