Practices and Recommendationsaimed at reducing the risk of money laundering and terrorist financing in the Luxembourg Fund Industry

guidelines

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Intermediary Investor

Risk Assessment: Composite of:

• Type of person/entity • Type and nature of

business • Jurisdiction/supervision • Ownership and

management structure • Customer base • Reputation • AML and CTF

policies/procedures • AML

investigations/sanctions • Type, purpose, and

anticipated activity • Distribution channel • Transactions

Risk Assessment: Composite of:

• Type of person/entity

• Jurisdiction • Type of business • Ownership &

management structure

• Type, purpose, and anticipated activity

• PEP • Source of

funds/wealth • Distribution channel • Transactions

Low Risk Medium High

Drives level of KYC and sets level for transaction monitoring

Screening against sanction and PEP lists

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Minimum Due Diligence Obligations

EEA/EU/Equivalent Intermediary

Adaptation of the extent of normal due diligence measures on a risk-sensitive basis on the Intermediary. AND Enhanced due diligence measures on the Correspondent Relationship.

RIN Intermediary

Normal due diligence on the Intermediary. AND Enhanced due diligence measures on the Correspondent Relationship with written documentation of the AML/CTF responsibilities of the Intermediary.

Intermediary in jurisdiction with strategic AML/CTF deficiencies

(Categories 3 and 4 in section V.E.)

nhanced due diligence on the Intermediary (including certification of relevant identification documents of the Intermediary). AND

Enhanced due diligence measures on the Correspondent Relationship with detailed written documentation of the AML/CTF responsibilities of the Intermediary. AND Intermediary’s written commitment to provide relevant Customer due diligence data to the UCI/Professional upon request.

Intermediary in jurisdiction subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing risks emanating from the jurisdictions (Category 5 in section V.E.)

As part of the counter-measures to protect the financial system from the on-going and substantial money laundering and terrorist financing risks, no Correspondent Account will be opened. The UCI/Professional is responsible for the due diligence on the underlying Investor of the Intermediary, as defined in the Regulation.

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Practices and Recommendationsaimed at reducing the risk of money laundering and terrorist financing in the Luxembourg Fund Industry

guidelines

© ALFI July 2013. All rights reserved.

The practices and recommendations outlined in this document are adopted by theAssociation of the Luxembourg Fund Industry (ALFI), the Luxembourg Bankers’Association (ABBL), the Association of Luxembourg Compliance Officers (ALCO) and the Association of Professionals in Risk Management, Luxembourg (ALRiM).

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