Luxembourg watchdog fines nine firms after Panama Papers review
Luxembourg's financial watchdog has fined nine banks and investment firms a total of €2.012 million for breaching anti-money laundering rules in the wake of last year's publication of the Panama Papers.
A leaked trove of documents from Panamanian law firm Mossack Fonseca revealed the extensive use of opaque offshore companies by the world's rich and famous, which enabled tax avoidance, tax evasion, fraud and money laundering.
The Commission de Surveillance du Secteur Financier (CSSF) has now sanctioned four banks - CA Indosuez Wealth, DNB Luxembourg, Nordea Bank, Novo Banco - and five investment firms - Experta Corporate and Fund Services, Link Corporate Services, Maitland Luxembourg, Pure Capital and Victory Asset Management – for medium or severe breaches following a review.
"The CSSF will continue to firmly request and enforce the principle that Luxembourg banks, investment firms and other professionals in the financial sector thoroughly follow the professional obligations in the future, specifically with regards to the prevention of money laundering," the regulator said.
The watchdog said it started to perform a comprehensive review of corporate accounts following the publication of the Panama Papers in April 2016, particularly examining 'know your customer' and 'know your transaction' obligations.
The review covered a large number of banks and their due dilligence of offshore structures, and was broadened in 2017 to also include investment firms and other professionals in the financial sector.
The CSSF said that adherence to Luxembourg laws and regulations was “the norm for a large majority” of supervised firms.
For minor breaches, the regulator issued injunctions that have been immediately complied with.
However, where medium or severe breaches were found, the regulator said it decided to impose administrative sanctions, resulting in the fines for the nine firms.
More than 10,000 offshore companies created by Mossack Fonseca in Panama had a link with Luxembourg.
The current director general of the CSSF, Claude Marx, was himself named in the Panama Papers, having authorised offshore entities on behalf of his former employer HSBC Private Bank.