Does Luxembourg remain a centre for money laundering?

Luxembourg's reputation as a "haven for dirty money" persists - despite reforms, transparency and international scrutiny. Echoes of the era of bank secrecy are still echoed by high-profile critics such as Alain Bauer, a French criminologist, and Roberto Saviano, an Italian journalist famous for fighting the mafia. They reiterated concerns that Luxembourg remains one of the centres of global financial opacity.

But compliance and anti-money laundering experts see a different picture. Halim Megharbi, a French anti-money laundering expert and author of Money Mask, argues that the country has done a great job over the past ten years, doubling the number of CSSF (financial regulator) staff and strengthening controls at all levels.

He emphasises that in today's financial system, criminals should not be expected to come to the bank with suitcases of cash. Luxembourg is a highly regulated jurisdiction with a focus on transaction transparency and international co-operation. Yes, a lot of transactions happen here, but because of scale, not criminal intent. Much more dangerous, he said, are the Emirates and the US, where it is much easier to "embed" dubious capital into the economy through large infrastructure projects and looser regulations.

Risk assessment: high, but controllable

In its latest national report, the Luxembourg Ministry of Justice recognised that the financial sector still has a high "natural" risk of laundering, but noted that this has been reduced to an "average" level by the measures in place. This does not mean that the problem has been eliminated, but emphasises the effectiveness of the current control system.

Nevertheless, even domestically, there are disputes about compliance with standards. Some financial institutions, as L'essentiel's sources recognise, can be selective, especially when a lucrative client is at stake. Halim Megharbi attributes this to the "legacy" mindset of the noughties and the lack of maturity of compliance teams, which were often already learning on the job.

The main problem, in his opinion, is a lack of communication on the part of the authorities and stereotypes ingrained in the public mind. Despite the fact that bank secrecy in Luxembourg ended more than a decade ago, the shadow of the past continues to shape the perception of the country abroad.

Luxembourg does play an important role in the global financial system. As such, it is inevitably involved in complex schemes, even without being the initiator. However, to confuse participation in the global economy with centralised laundering is to fail to see the difference between scale and intent.