LUXEMBOURG Law and Practice Contributed by: Anna Gassner, Philipp Mössner, Andrea Carraretto and Etienne Weryha, GSK Stockmann SA
• implement customer due diligence measures (know your customer – KYC); • ensure an adequate internal organisation with respect to fighting money laundering and terrorist financing; and • maintain transactional records as well as report any suspicious transactions or activities to the Luxem - bourg Financial Intelligence Unit (FIU) ( Cellule de Renseignement Financier ). A further EU AML package, partly applicable from early 2025, was adopted on 19 June 2024 by the European Parliament. This package includes the intro - duction of the Sixth AML Directive, a proposed AML regulation introducing stricter due diligence require - ments, enhancing beneficial ownership transparency and strengthening the monitoring of transactions. It also provides for the establishment of a new European AML authority, the Authority for Anti-Money Launder - ing and Countering the Financing of Terrorism (AMLA). AMLA, which is a decentralised EU agency, will pro - gressively co-ordinate national authorities to ensure the correct and consistent application of EU AML rules. It is expected to start direct supervision on 1 January 2028. 3.3 Sanctions, National Security and Foreign Investment Controls In Luxembourg, restrictions on co-operation with JV partners arise from both EU regulations and national legislation. At the EU level, as a member state, Lux - embourg is subject to the EU sanctions regulations. At the national level, the Law of 14 July 2023 on For - eign Direct Investment (the “FDI Law”), implementing Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019, establishes a national screening mechanism with respect to foreign direct investments that could impact national secu - rity or public order. With some exceptions, the FDI Law requires that direct investments made by foreign investors, ie, natural persons or legal entities resid - ing outside the EEA, seeking to gain control over a Luxembourg entity, be reviewed by the Ministry of the Economy if they involve critical sectors within Lux - embourg, such as energy, transport, water, health, communications, data processing and storage, aero - space, defence, finance, media and business, as well as the trade of dual-use goods or which could affect
national security. The FDI Law entered into force on 1 September 2023. Beyond sanctions and national security considera - tions, there are additional regulatory and legal frame - works that may impose restrictions on JVs, including sector-specific regulations, competition law and other compliance requirements. 3.4 Competition Law and Antitrust JVs in Luxembourg are currently not subject to a national ex ante merger control regime. Hence, to date, the antitrust regulation applicable to the set - ting up of JVs, if the latter qualify as a concentration, is the EU Merger Regulation on the control of con - centrations between undertakings (Regulation (EC) No 139/2004) (the “EU Merger Regulation”). The EU Merger Regulation provides for an obligation to notify the European Commission should the thresholds set therein be met by the JV. At the national level, should the JVs fall outside the scope of the EU Merger Regulation, no mandatory obligation to notify the Luxembourg national competi - tion authority (NCA) currently exists. As per applicable Luxembourg laws, the NCA can only perform an ex post intervention with the aim of ensuring the proper functioning of the EU internal market. Luxembourg is in the process of reshaping its com - petition framework, with the proposed enactment of Draft Bill No 8296, which would establish a national ex ante merger control regime. This would require JVs to be notified to the NCA before being created if they could potentially affect competition in Luxembourg. The NCA review will be triggered if the parties involved in the concentration have a combined total turnover generated in Luxembourg of more than EUR60 million and at least two of the parties involved in the con - centration have individual turnovers generated in Lux - embourg that exceed EUR15 million. The NCA would have the authority to examine a concentration that falls below the above-mentioned thresholds if it con - siders that such concentration could affect competi - tion in the Luxembourg market. This new regime will undoubtedly impact the timeline for implementing a JV in Luxembourg, adding another layer of regulatory
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