Luxembourg’s financial crime watchdog bemoans lack of firepower
14 Jan 2020

Five years after the LuxLeaks revelations, the fight against white collar crime is failing to take off, according to the magistrates in command.

This is due to a lack of qualified staff and the increasing complexity of financial transactions. The two men in charge of the fight – Patrick Konsbruck, deputy prosecutor at the economic and financial prosecutor’s office and Max Braun, director of Luxembourg’s Financial Intelligence Unit (CRF) – are in search of more resources.

Five years after LuxLeaks, has much changed in Luxembourg?

Patrick Konsbruck: We did not wait for LuxLeaks to start our work. Just as we are not waiting for the next FATF visit to improve our fight against money laundering. Such revelations are just part of the franticc periods we sometimes get. Since then, there have certainly been new developments in the law, and a simplification of administrative procedures. What hasn’t changed is the lack of resources.

Max Braun: The LuxLeaks revelations have not really changed much in our daily lives. We were already working on these themes before, I can assure you that. Just as we anticipate the implementation of European directives, such as the exchange of information between countries.

How are you experiencing the change in the political and administrative climate that has occurred since 2014?

MB: The fight against money laundering and the financing of terrorism is constantly evolving. In the 1980s, the primary offence was drug trafficking. Today, the list of crimes include corruption, organised crime and criminal tax offences. We know how to adapt to these new challenges, as we have recently proven by regulating virtual currencies.

Have your resources been strengthened in the past five years?

MB: Five years ago we were with four magistrates, five analysts and a computer scientist. Now, we are five magistrates, ten financial analysts and three computer scientists. As a result, our work has become more focused on prevention: we better assess trends and have helped banks to avoid certain frauds.

PK: We were eight magistrates in 2014, and nine today. Unfortunately, we do not have a financial analyst or an economist. In addition, all our judges also practice common law and deal for example with burglary, assault and battery. We are struggling somewhat with our current headcount to carry out the work.

How many financial crime investigations have been carried out in the past five years?

PK: Between five and ten investigations are under way against Luxembourg residents for suspicions of money laundering. These are very delicate cases and partly already under investigation, regarding very large scale money laundering. However, I do not have a precise figure on the number of investigations launched since 2014.

You should know that the prosecution receives the files detected by the CRF, the CSSF or the judicial police. More magistrates dedicated to economic crimes would be needed to handle all these cases. In our investigations, we are sometimes confronted with armies of lawyers assisted by consultants of all kinds.

What resources would you need to properly deal with the matters brought to your attention?

PK: In Geneva, for example, the prosecution unit which deals with complex cases has nine magistrates dedicated full time to this type of case. This figure would represent almost a third of the current prosecution staff, and I would be happy with a similar headcount. We need more specialised magistrates, analysts and IT specialists.

By Alexander Abdelilah and Julie Edde, Luxembourg Times, 13 January 2020

Read more at Luxembourg Times

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet

FREE CPD Wallet