Ruling [LUX] ¦ RBE Misdeclaration Leads to Criminal Sanction in Cross‑Border Tax Probe

Luxembourg Court Confirms Plea Deal – Lawyer and Domiciliation Company Fined €50,000 Each for False Beneficial-Owner Declaration

On 13 November 2025 the Tribunal d’arrondissement de Luxembourg, seventh chamber, validated a negotiated judgment (judgement sur accord) settling criminal proceedings arising from discrepancies uncovered during the execution of two German mutual‑legal‑assistance requests concerning alleged tax fraud. The case centered on SOCIETE1.), a Luxembourg domiciliation company, and an individual lawyer, PERSONNE1.), who both admitted that a declaration lodged on 11 September 2019 in the Luxembourg Register of Beneficial Owners (RBE) was inaccurate. The material issue was that the RBE entry identified the lawyer as the sole beneficial owner of SOCIETE1.), whereas documentary evidence – a nominee agreement, shareholder register extracts and an ownership chart – pointed to PERSONNE4.) as the actual ultimate beneficiary. The court accepted an agreement between the parties and the public prosecutor: each defendant was fined €50,000 and certain seized documents and electronic media were ordered confiscated.

How cross‑border tax enforcement triggered an RBE investigation

The procedural origin was two German investigation orders (DEE) into suspected tax evasion by PERSONNE4.). German investigators concluded that a Swiss company, allegedly producing thermoplastic sheets, had in fact booked revenues generated by German operations, thereby shifting taxable profits out of Germany. Those hidden proceeds had funded a high‑value yacht purchase; the yacht was delivered to SOCIETE1.) in Luxembourg. Execution of the DEE in Luxembourg included searches at law firms and a review of public registers (RCS and RBE). That work uncovered an inconsistency: although the RBE listed PERSONNE1.) as the sole beneficial owner of SOCIETE1.), internal company documents and nominee arrangements established that PERSONNE4.) was the real ultimate owner. The mismatch triggered a focused criminal inquiry by the SPJ (Service de Police Judiciaire), which led to the indictment and ultimately to the plea agreement.

Legal framework – why accurate RBE entries matter

Luxembourg law requires that RBE entries be adequate, accurate and up to date. This duty implements EU anti‑money‑laundering standards designed to ensure transparency over ultimate ownership of companies and thereby prevent misuse of corporate structures for tax evasion or other illicit ends. The criminal provision at issue – article 20(2) of the amended law establishing the RBE – penalizes an entity that knowingly submits false, incomplete or outdated beneficial‑owner information with a substantial fine. The policy rationale is straightforward: an effective RBE is essential to enable financial institutions, law enforcement and other authorities to detect suspicious transactions and trace the real human beneficiaries of legal entities.

Bastian Schwind-Wagner _Follow

"The false declaration in the Register of Beneficial Owners exposed how nominee arrangements can be misused to obscure true ownership and facilitate cross‑border tax evasion. The court’s decision underscores that professionals who file registry data must verify and keep current the substantive facts they report.

This outcome reinforces the practical importance of robust client due diligence and clear documentation for nominee relationships. Timely correction of registry entries and full cooperation with authorities reduce legal and reputational risk, but they do not eliminate liability for prior knowingly inaccurate filings."

Facts accepted by the court

Under the agreement, the court recorded that SOCIETE1.) had, from at least 11 September 2019 until 19 July 2022, submitted a request to register as beneficial owner the identity of PERSONNE1.), while documentary proof showed that the company’s shares were held by SOCIETE8.), a nominee vehicle, for the account of PERSONNE4.), who was the true beneficial owner. Material evidence included the nominee agreement dated 21 January 2013, shareholder register extracts, an ownership organigram dated 23 October 2019, and a formal notification of termination of nominee services addressed by the nominee provider to PERSONNE4. The court also accepted that PERSONNE1.), in his capacity as lawyer and as director or de facto manager of the domiciliation company, cooperated in the submission of the false entry.

Charges resolved and charges not pursued

The written record shows that the original investigative remit included further potential offences – notably breaches of domiciliation rules and anti‑money‑laundering obligations – but the public prosecutor requested, and the chamber of the conseil granted, non‑prosecution for those counts based on the available evidence and legal assessment. The plea agreement focused solely on the RBE offence under article 20(2).

Penalty, confiscation and procedural consequences

Pursuant to the negotiated settlement, both SOCIETE1.) and PERSONNE1.) were each fined €50,000. The court set a default coercive‑detention period of 500 days in case of non‑payment. The judgment also ordered confiscation of a list of seized files and a CD‑ROM that had been obtained during earlier searches – documents the court treated as evidentiary items and as objects connected to the offence. The court fixed legal costs (liquidated at a modest figure for the procedural step) and confirmed that the judgment is appealable within the statutory 40‑day period.

Key compliance lessons for practitioners and corporate service providers

This case illustrates several enduring lessons for corporate service providers, lawyers acting as domiciliation service providers and corporate clients:

1. Registrations to the RBE must accurately reflect the substantive reality of ownership and control at the time of filing. The RBE is not a place for provisional or aspirational entries related to planned restructuring. Entries must be accurate, comprehensive and up to date.
2. Nominee and trustee structures require meticulous documentation and clear, contemporaneous records showing who ultimately controls and benefits from shares. Where nominee arrangements exist, filings should accurately state the nature of the relationship and reflect the ultimate beneficiary in accordance with the applicable legal definitions.
3. Professionals who act as intermediaries carry heightened exposure. Lawyers and other gatekeepers who facilitate corporate formations or submit registry information may be held criminally liable where they knowingly participate in submitting false beneficial‑owner data.
4. Cross‑border investigations magnify risk. Information obtained by foreign authorities via mutual legal assistance can expose discrepancies between private documentation and public registers, triggering domestic enforcement and reputational consequences.
5. Remediation must be timely and transparent. Where an error or omission is discovered, prompt corrective filings and cooperation with authorities reduce litigation risk but do not necessarily prevent sanctions if the prior conduct amounted to knowingly false declarations.

Wider implications for anti‑money‑laundering enforcement

The case reaffirms the growing importance national registries now play in international financial‑crime investigations. EU developments and recent AML directives have increasingly elevated registry accuracy as a core element of the global AML architecture. Prosecutors are signaling that false beneficial‑owner declarations will not be treated lightly, especially in cases intertwined with alleged tax fraud or cross‑border asset movements. This judgment should therefore be read by compliance officers, registrars and legal advisers as part of an accelerating trend: transparency obligations carry real criminal exposure when breached knowingly.

Concluding remark

The Luxembourg court’s validation of the plea agreement delivers a clear message: the integrity of beneficial‑owner data is central to modern financial‑crime prevention, and failures to ensure that public registers reflect substantive ownership can trigger criminal sanctions for both legal entities and the professionals who act for them. The judgement on accord offers a cautionary example for any practitioner involved in company formation, nominee arrangements and registry filings – accuracy and timely updates are not mere formalities but legal imperatives.

Dive deeper

• La Justice Grand Duché de Luxembourg ¦ Décisions intégrales des juridictions judiciaires ¦ Link
• Journal officiel du Grand-Duché de Luxembourg ¦ Loi du 13 janvier 2019 instituant un Registre des bénéficiaires effectifs ¦ Link