Luxembourg Client briefing: Circular CSSF 21/788 – New Audit Report

Circular CSSF 21/788[1] applies to the following Luxembourg entities (the Addressees): authorised investment fund managers as defined in Circular CSSF 18/698, registered alternative investment fund managers (Registered AIFMs), and investment funds supervised by the Commission de Surveillance du Secteur Financier (CSSF) for AML/CFT purposes, which have not appointed an investment fund manager. The Addresses must mandate an external AML/CFT expert (the External AML/CFT Expert). The External AML/CFT Expert must issue every year an AML/CFT External Report.

The External AML/CFT Expert has to be a Luxembourg authorised auditor (réviseur d’entreprises agréé – REA). Where Addressees already had to appoint a REA, this REA will be their External AML/CFT Expert. Registered AIFMs that did not have to appoint a REA so far will now have to appoint a REA as their External AML/CFT expert.

The Addressees must submit the AML/CFT External Report to the CSSF via eDesk within 6 months of their financial year end. For the financial year ending 31 December 2021, an extension of three months is granted.

More about the AML/CTF External Report

What will the report contain?

The AML/CFT External Report is made up of two sections. One section is a corroboration of responses given by the entity in the context of the latest annual CSSF AML/CFT survey[2]. The other section is dedicated to sample testing or specific work to be performed by the External AML/CFT Expert.

The sample sizes are determined by the CSSF using a risk-based approach.

The procedures to be performed by the independent auditor will mainly consist in answering the questions determined by the CSSF. These questions will in principle be “closed”, i.e. the answers are not constituting an audit opinion or other form of opinion.

How and when to submit the AML/CFT External Report?

The AML/CFT External Report must be submitted to the CSSF via the eDesk platform by the “Responsable du Contrôle du respect des obligations professionnelles en matière de lutte contre le blanchiment et contre le financement du terrorisme” (“RC”) or by the “Responsable du Respect des obligations professionnelles en matière de lutte contre le blanchiment et contre le financement du terrorisme” (“RR”) or by a member of the board of directors/managers (or equivalent) of the Addressee. Submissions are due on an annual basis within 6 months of the financial year end of the Addressee. This deadline is extended to 9 months for entities having a financial year end of 31 December 2021.

[1] Circular CSSF 21/788 Guidelines for the Collective Investment Sector on the CSSF AML/CFT external report of 17 December 2021 https://www.cssf.lu/wp-content/uploads/cssf21_788eng.pdf

[2] The annual CSSF AML/CFT survey must be answered by the Addressees within a given timeframe, typically at the beginning of each calendar year. For 2022, the CSSF AML/CFT Survey has begun 15 February, answers must be submitted by 15 April 2022.