FATF Status

Luxembourg is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Luxembourg was undertaken in 2023. According to that Evaluation, Luxembourg was deemed Compliant for 28 and Largely Compliant for 11 of the FATF 40 Recommendations. It was rated Highly Effective for 3 and Substantially Effective for 6 of the Effectiveness Compliance ratings.

In 2023, Luxembourg ranked as the ninth least-corrupt country globally, with improvements in its Corruption Perceptions Index score and compliance with anti-money laundering regulations. The government has implemented measures such as a whistleblower law and established the Committee for the Prevention of Corruption to enhance transparency and combat corruption. While corruption is not a significant issue for businesses, some cases have highlighted conflicts of interest, prompting ongoing efforts to improve government document access and overall transparency.

Luxembourg is the third-wealthiest country in the world based on GDP per capita, despite its small size and population. The economy has shown resilience through recent challenges, including a slight decline during the COVID-19 pandemic and a recession in 2023, but is expected to recover and grow steadily in the coming years. The financial sector plays a crucial role, accounting for about one-third of GDP, making the economy vulnerable to market volatility.

Luxembourg offers a highly attractive investment climate characterized by political stability, transparency, and a strong focus on growth sectors, particularly in finance and technology. The government actively supports foreign direct investment (FDI) with no restrictions on foreign ownership and a recent foreign investment control regime to ensure security in critical sectors. Additionally, Luxembourg's strategic location as a gateway to Europe and its robust financial sector make it a prime destination for international investors.