Asset freezes in Luxembourg — loi du 19 décembre 2020
In Luxembourg, a frozen account is reported to the Ministry of Finance, and so is a blocked attempt. Article 6 of the loi du 19 décembre 2020 relative à la mise en œuvre de mesures restrictives en matière financière requires every person who applies a restrictive measure to inform the minister of each one, attempted operations included. The CSSF supervises how you do it. A bill now in the Chambre des Députés, no. 8579, would turn a failure to report information on frozen funds into a separate offence, with fines for firms based on worldwide turnover. This guide covers the law as it stands, the Ministry’s channel and form, homonyms, the CSSF angle and what bill 8579 changes.
1. The law of 19 December 2020
The law was published in Mémorial A no. 1072 on 23 December 2020 and entered into force on 27 December 2020. It replaced the law of 27 October 2010, which covered terrorist financing only. Its scope now reaches every financial restrictive measure adopted by the UN Security Council under Chapter VII and by the EU under Article 29 TEU and Article 215 TFEU.
| Article | What it does | What it means for a payment firm |
|---|---|---|
| Art. 3 | Measures bind Luxembourg nationals, legal persons with a seat or establishment in Luxembourg, branches in both directions, and anyone operating on the territory | A Luxembourg branch of a foreign EMI or PI is in scope in its own right |
| Art. 4(2) | A person on an EU or UN list is designated automatically, by reference to the list | No national act to wait for: the freeze applies from the EU or UN listing |
| Art. 5 | A grand-ducal regulation can impose a national measure for up to 60 days, extendable by 30-day periods, pending an EU or UN decision | Screen against the Ministry’s national list as well as EU and UN lists |
| Art. 6(1) | Persons applying the measures inform the Minister of Finance of the execution of each measure, including attempted operations; the minister handles questions and grants derogations | The notification duty — see section 2 |
| Art. 6(2)–(4) | The CSSF, the Commissariat aux assurances and the AED supervise their populations, with the powers of the AML law of 12 November 2004 | The CSSF can inspect and sanction your sanctions controls |
| Arts. 8–9 | Good-faith application carries no liability unless gross negligence is shown; good-faith disclosure to the authorities does not breach professional secrecy | Freezing and reporting in good faith protects the firm and its staff |
| Art. 10 | Breach is punished by eight days to five years’ imprisonment and a fine of EUR 12,500 to EUR 5,000,000, or one of these; up to four times the sum involved where the gain was substantial | The current criminal exposure |
2. Notifying the Ministry: channel, form, content
The competent service is the Ministry of Finance’s Direction Affaires multilatérales, développement et compliance, 3 rue de la Congrégation, L-1352 Luxembourg. Notifications and questions go by e-mail to sanctions@fi.etat.lu or by post. The Ministry’s best-practice guide puts the timing in two steps. Freeze the funds without delay once you know a person is listed. Then inform the Ministry without delay of the freeze, with all relevant information, and add anything that would help it decide what happens to a blocked transaction.
For transfers, the Ministry publishes a Form for transfers of funds subject to restrictive measures (version of 16 February 2024, in French and English). The same form is used for a notification and for a request for authorisation. Its 16 sections ask for:
- the type of request, and whether it relates to an earlier notification (with its date and reference);
- the legal basis — the EU regulation or Council decision relied on;
- the submitting firm and a contact person;
- the sanctioned country, and the amount in original currency with the EUR equivalent;
- payer and payee details, including the beneficial owner of a company, the IBAN, the BIC and the payment service provider;
- the economic reason for the transfer, any export licence, intermediaries, foreign authorisations, and which other Luxembourg authorities you have informed.
The form wants a valid passport copy or a register extract no older than one month for each party. Sections that do not apply are marked “Not Applicable”, which does not cause rejection. An incomplete form can delay or sink the request. It is signed and dated, and it ends with five confirmations, including that the Ministry may check the data with other administrations.
That is the point most often missed. Many firms’ sanctions procedures only produce a report when a balance is blocked. In Luxembourg, a rejected outbound payment or a returned inbound credit involving a listed person is also an executed measure. Log it and notify it.
3. Homonyms: suspend, gather identifiers, decide on the record
The guide treats a homonym as a name identical to a listed person’s, or close to it because of transliteration. Until the match is resolved, the account is monitored and all transactions are suspended. The case goes to the Ministry without delay if doubt remains.
A name match alone does not prove identity. Other identifiers can rule it out: date of birth, passport number, location, profession. The firm must collect them without delay and keep a written record of what it found. If the identifiers clearly show two different people, the Ministry does not need to be contacted. If any doubt remains, ask the Ministry and keep the account suspended. Following the EU Best Practices, the guide adds that thin identifiers are never a reason to deal with a possible designated person.
4. The CSSF and the CRF
The CSSF supervises application of the law for its population under Article 6(2). The Ministry’s guide refers to Article 33(2) of CSSF Regulation No 12-02. Under it, supervised persons keep the CSSF informed when a person in a transaction or business relationship is subject to terrorism-related financial measures, in addition to applying the measure and informing the competent authorities. For insurance firms, the guide says a copy of the report goes to the Commissariat aux assurances. The CSSF’s financial crime pages carry its sanctions material.
The financial intelligence unit (Cellule de renseignement financier, CRF) is a separate track. If the facts give grounds to suspect money laundering, a predicate offence or terrorist financing, file a suspicious transaction report through goAML. That duty is in addition to the freeze and the Ministry notification. The CRF can also give its own instruction not to execute a transaction, which is limited in time and does not need a prior STR.
5. Bill 8579: what will change
Directive (EU) 2024/1226 harmonises criminal offences for breaching EU restrictive measures. The transposition deadline was 20 May 2025. Luxembourg’s bill no. 8579 was filed on 11 July 2025. The Conseil d’État gave its opinion on 3 February 2026, and the Justice Committee adopted amendments on 2 July 2026. As of October 2026 the bill is still in committee. It has not been voted and is not law yet.
| Point | Law today | Bill 8579 (coordinated text, July 2026) |
|---|---|---|
| Crypto-assets | Not named in the definition of funds | Added to “fonds” in Art. 2(1) |
| Offences | One general offence: non-compliance with the measures | A list of offences in a new Art. 10(1)–(2), including failing to freeze, circumvention, and failing to give the authorities information on frozen funds, or on unfrozen funds, obtained in a professional activity |
| Natural persons | 8 days–5 years; EUR 12,500–5,000,000 | Same range; the maximum can be doubled where committed in a professional capacity by a professional under the AML law |
| Legal persons | General Criminal Code rules | Up to 5% of worldwide turnover (or EUR 40 million if turnover cannot be determined) for most offences; up to 1% (or EUR 8 million) for the information offences |
| Supervisory rules | Supervisors ensure effective monitoring | The CSSF and the CAA may set the content of the required measures by regulation or circular |
| Coordination | — | A new inter-agency committee co-chaired by the Foreign Affairs and Finance ministries, with the CRF, the CSSF and the prosecutors |
For a payment firm, the most important line is the information offence. The duty to report frozen funds becomes a criminal obligation in its own right, separate from the duty to freeze. Check the final text when the bill is voted and published in the Mémorial. Article numbers and amounts can still change.
6. Three worked scenarios
Scenario one — a blocked outbound payment. A customer of a Luxembourg EMI orders a EUR 8,000 transfer to a company that the EU listed last week. Screening stops the payment, and the customer’s account holds nothing frozen. Rule: Art. 6(1) — each measure executed, attempted operations included. What compliance does: rejects the payment and notifies the Ministry by e-mail with the payer, the payee, the amount and the legal basis. It reviews the customer’s other payees for links to the listed company. Outcome: the notification is on file. If links appear, an STR to the CRF follows.
Scenario two — a homonym on an incoming credit. An inbound SEPA credit names a payer whose name is identical to a listed person’s. Rule: the Ministry’s homonym guidance. What the analyst does: suspends the credit and requests the payer’s date of birth and address through the payer’s PSP. The data show a different birth year and country of residence. The analyst records the comparison and releases the credit with a signed note. Outcome: because the identifiers clearly show two different people, no contact with the Ministry is needed. If the data had been missing, the credit would stay suspended and the Ministry would be asked.
Scenario three — a release request for a listed customer. A listed individual’s frozen account must pay rent under a lease signed before the listing. Rule: the derogation in the applicable EU regulation, granted by the Minister of Finance under Art. 6(1), second subparagraph. What compliance does: fills in the transfer form as an authorisation request. It cites the derogation article, attaches the lease, the landlord’s register extract (under one month old) and the IBAN, and marks the export-licence section “Not Applicable”. Outcome: the payment goes out only after the written authorisation arrives, and only within its terms.
7. FAQ
Who is the competent authority for asset freezes in Luxembourg?
The Minister of Finance, through the Direction Affaires multilatérales, développement et compliance (Art. 6(1) of the law of 19 December 2020). The CSSF supervises the financial sector’s compliance.
How do I notify a freeze?
Without delay, by e-mail to sanctions@fi.etat.lu or by post to 3 rue de la Congrégation, L-1352 Luxembourg. For transfers, use the Ministry’s form for transfers of funds subject to restrictive measures.
Do rejected payments count?
Yes. Article 6(1) covers the execution of each restrictive measure, attempted operations included.
Is a name match enough to freeze permanently?
No. Suspend, gather identifiers and record the result. Contact the Ministry only if doubt remains.
Has Luxembourg transposed Directive (EU) 2024/1226?
Not yet. Bill no. 8579 was amended in committee in July 2026 and has not been voted. Until it is, Article 10 of the 2020 law, with its single general offence, applies.
8. What to do, today
- Change your procedure so that blocked or rejected payments involving listed persons also produce a Ministry notification, not only frozen balances.
- Screen against the Ministry’s national list under Article 5 as well as the EU and UN lists.
- Keep the transfer form ready with your firm’s fixed data filled in. Note the one-month limit on register extracts.
- Write the homonym procedure as suspend, gather identifiers, record, and escalate to the Ministry only on doubt.
- Run the STR decision to the CRF in parallel with the freeze. Never treat one as covering the other.
- Track bill 8579. When it passes, check that your controls can show on time that frozen-funds information reached the authorities.
Related: EU asset freeze reporting — the Article 8 duty · Filing a SAR in Luxembourg via goAML · CSSF Regulation 12-02 · Frozen-funds reporting in Germany
