The AML-CFT obligations aim to combat the use of professionals for money laundering and terrorist financing purposes. For the actors of the financial centre in the broad sense, compliance with these obligations is as complex as it is crucial. To discuss this topic, we met Helena Finn and Glenn Meyer, respectively Senior Associate and Partner at Arendt & Medernach.

• Can you remind us what is in the AML-CFT bonds?

Helena Finn: "There are two aspects to these obligations. On the one hand, the repressive, criminal aspect, which concerns money laundering offences or the financing of terrorism, and of which professionals can become accomplices. But the one that will occupy us today is the preventive component, also criminally sanctioned, which contains three groups of main obligations: the obligation to know one's customer or know-your-customer (e.g., obligation to identify the customer, the agents of this customer and the economic beneficiaries, e.g. the natural person behind a structure), the obligation to have an adequate internal organisation (which covers, for example, the procedures that the trader must put in place with the help of persons dedicated to this task), and the obligation to cooperate with the authorities (active – in case of suspicion of the the professional's share; passive – on request).

Glenn Meyer: "This matter and the obligations summarized by Helena have their own dynamics and are constantly evolving with the impulses of the FATF and/or the European Commission. Companies must therefore be very careful: beyond the risk of sanction, it is the reputation of professionals that is at stake. In the financial field, everything is built, but also lost, on reputation issues.

• Who is affected by these obligations?

G.M.: "If I may, I would rather reverse the question as follows: who is not yet concerned? The circle of persons covered by these obligations is indeed very wide. Over the years, the scope of the AML law has expanded considerably, with almost every new directive bringing in new players. It must be understood that, from now on, the slightest payment of more than 10,000 euros in cash places even merchants of valuable goods in the 'viewfinder' of this law.

H.F.: "There are therefore all professionals in the financial sector, such as  banks, financial institutions, investment funds and their managers, but also a whole series of other professionals, including lawyers and notaries, valuable property dealers, real estate agents, etc. Since the ^5th Directive, virtual asset service providers that were not yet subject to any regulation in this area now also fall within the scope of the AML law.

• Concretely, what does this law imply for the actors concerned?

H.F.: "This is a heavy responsibility for professionals, because it implies compliance with all the obligations mentioned above, therefore, for example, the implementation of the entire know-your-customer process as well as solid policies and procedures for this purpose, detailed documentation of entry into contact with customers, computer systems to store information, but also software to screen against terrorist lists / sanctions, to have a compliance team adapted to the size of its structure, with at least one Compliance Officer and one person from the management in charge of these themes, etc. The supervisory authorities shall ensure compliance with these obligations and shall regularly carry out on-site inspections in this area.   

G.M.: "Helena's description is quite exhaustive, I would simply add that non-compliance with these obligations is heavily punished, both criminally and administratively.

• Does the health crisis give these obligations a particular resonance?

H.F.: "Indeed, the law, when it was drafted, was based on the model of entering into a relationship in a physical way, with a meeting at the counter, for example, and an exchange of paper documents. Digitalization has greatly accelerated in recent years, and this model is less and less adapted to reality, and the current context has considerably accelerated the movement. With physical distancing, meeting customers as well as collecting information and documents are more complex, as is document compliance certification.

G.M.: "The entry into electronic relations, without physical contact, was done before Covid, and with the transposition of the ^5th AML Directive, a legal framework has been put in place for this purpose. However, at this stage, there is still some uncertainty around taking measurements electronically. We will try to explain this during our next Webinar (jointly with the ABBL) on November 18th.  

• How does Arendt support its clients on this subject?

H.F.: "We have a very wide range of services in this area divided between several teams to best calibrate our services according to the client in question, insofar as some obligations will differ somewhat depending on whether you are an investment fund or a bank, for example."

G.M.: "We can support a client in raising awareness of the various obligations that exist in the AML law, how to comply with them and what this means concretely for the client. Thus, our assistance can range from the drafting of the various policies and procedures to the drafting of legal opinions on the issue, or even to the accompaniment of the client in the remediation plans as well as his exchanges with the supervisory authorities. The questions are sometimes very technical, and a customer will often need an expert dedicated to very specific cases, and there, he will always be able to count on the teams of the Arendt group."