Luxembourg — Country Risk Report

Luxembourg (Europe • Western Europe). Risk report as of the 19 Jun 2026 FATF plenary.

Low country risk. Luxembourg's country risk score is 2.3/10, placing it in the low-risk band. The principal driver is weak political stability. Luxembourg is not currently FATF grey- or black-listed. Luxembourg is not subject to comprehensive country-wide sanctions.

Recommended treatment

Standard due diligence.

At a glance

• FATF status: Not currently listed (one indicator only; it does not set the overall country risk rating by itself)
• Comprehensive country sanctions: none identified. Targeted sanctions exposure: possible, screen applicable persons, entities and sectors
• Government effectiveness and rule of law: 1.3/10
• Corruption (CPI 2025): 78/100, rank #8 of 182
• Enforcement: 163 actions from 1 regulator

Country Risk Score: 2.3/10 (Low)

Higher score means higher country risk (global average 4.6). Full information available. Strong data coverage. Enforcement activity and CPI are shown for context but do not change the score.

All three parts of the score are available.

How this score was calculated

• Financial crime controls: 3.9/10 — 50% of this score
• Government effectiveness and rule of law: 1.3/10 — 30% of this score
• International sanctions: 0.0/10 — 20% of this score

International sanctions contributes 0.0 because the complete UN, UK, EU and US review found no direct country-level sanctions programme. People or organisations connected to the country may still appear on sanctions lists.

Principal risk drivers

• Government effectiveness and rule of law drive the score; no FATF listing or direct country-level sanctions were identified

Mitigating factors

• Not currently on the FATF grey or black list.
• No comprehensive country-wide sanctions programme.
• Comparatively stronger corruption (1.1/10).
• Overall governance and institutional quality are relatively strong.

Business impact

• Customer onboarding (Low): Additional ownership and control verification may be required.
• Payments and transactions (Low): Review transaction purpose, counterparties and geographic routing.
• Trade and export activity (Low): Screen goods, end users and potential dual-use exposure.
• Corporate clients (Low): Assess state ownership, government links and political exposure.
• Ongoing monitoring (Low): Apply alerts for ownership changes, sanctions and geopolitical developments.

Recommended controls

• Verify ultimate beneficial ownership using more than one reliable source.
• Identify state ownership, government influence and politically exposed persons.
• Screen entities, directors and beneficial owners against applicable sanctions lists.
• Apply enhanced review to technology, defence, telecommunications, financial services and dual-use activity.
• Document transaction purpose and source of funds where cross-border structures are complex.
• Escalate unresolved ownership opacity or adverse information to Compliance.

Enhanced due diligence triggers

• State ownership / control
• PEP involvement
• Sensitive / restricted sectors
• Opaque ownership
• Adverse media
• Dual-use goods & technology
• High-risk intermediary routing

FATF status: Not currently listed

Luxembourg is not on the FATF grey or black list as of the 19 Jun 2026 plenary.

Source details

International sanctions by issuing body

• UN: No
• EU: No
• UK: No
• US: No

No means the complete UN, UK, EU and US review found no direct country-level programme. People or organisations may still appear on sanctions lists.

Government effectiveness and rule of law (World Bank 2024, percentile)

• Government Effectiveness: 91/100
• Regulatory Quality: 84/100
• Rule of Law: 87/100

Enforcement activity

RegActions tracks 163 enforcement actions from 1 regulator in Luxembourg.

• CSSF — Commission de Surveillance du Secteur Financier (163 actions, 2020-2026)

The composite RegActions Country Risk Score does not use enforcement volume.

Regulators and legal framework

FATF network

FATF member.

Last mutual evaluation: 2023 · report

National regulators

• CSSF — Commission de Surveillance du Secteur Financier (163 actions, 2020-2026)

FIU: Egmont Group member (CRF)

Framework signals

• FATF listing: Not currently listed
• International sanctions: no listed programme identified
• BO register: Restricted (live since 2019)
• Corruption (CPI 2025): 78/100, rank #8 of 182
• Rule of law (WGI): 1.3/10 risk

Sector exposure

• Banking & payments (Low): No FATF listing, rule-of-law governance within normal range
• Trade & export controls (Low): No sanctions programme or FATF black-list constraint identified
• Crypto & virtual assets (Low): No FATF listing, accountability governance within normal range
• Real estate & luxury assets (Low): Corruption indicators within normal range for high-value assets
• State-linked & procurement (Low): Political-stability and corruption governance within normal range

Derived from sanctions tier, FATF listing, World Bank WGI governance and CPI; no per-sector dataset is asserted.

Luxembourg: analysis

Luxembourg's profile is the product of exceptional governance performance. Corruption (weighted 35%) is the lowest corruption reading in the batch and among the lowest globally. Rule of law and institutions (weighted 40%) is equally strong. Voice and accountability (strong) is excellent. Political stability (strong) is the comparatively weakest domain and still firmly low risk. No FATF listing or sanctions apply. The CPI reading and an upper-decile standing on the World Bank governance indicators confirm Luxembourg's position as a flagship low-risk jurisdiction. CSSF enforcement activity reflects the breadth and depth of a major international financial centre.

Outlook

Luxembourg's status as a premier European investment funds and private banking centre means its regulatory environment continues to evolve in step with EU AML developments, including AMLA and the new AML regulation package. The risk profile is stable and well-governed. Firms should apply standard proportionate due diligence but should be alert to the jurisdiction's role as an intermediary for global capital flows, where the source-of-funds integrity of non-EU investors and fund structures warrants appropriate scrutiny.

Key watchpoints

• Monitor CSSF enforcement patterns for sectoral themes relevant to fund management, private banking and payment services.
• Track EU AMLA implementation and any impact on CSSF supervisory responsibilities as the new authority becomes operational.
• Apply source-of-funds and beneficial ownership scrutiny for fund structures and investment vehicles where ultimate investors are from higher-risk jurisdictions.
• Review developments in Luxembourg's tax and transparency frameworks as international OECD and EU standards continue to tighten.

Assessment currency

• FATF status: Not listed (as of 19 Jun 2026)
• Sanctions exposure: None identified (as of Jul 2026)
• Governance (WGI): Latest dataset incorporated (as of 2024)
• Corruption (CPI): 78/100 (as of 2025)
• RegActions assessment: Reviewed (as of 19 Jun 2026)

Public evidence layer

FATF action: none. No FATF call-for-action or increased-monitoring status was identified at the latest plenary. This does not establish low risk.

Contextual signals (not scored)

• FATF network membership: Direct FATF member (present, as of 2026-07)
• EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
• Egmont Group FIU: CRF (present, as of 2026-07-17)
• Beneficial-ownership register: Restricted (live since 2019) (present, as of 2026-07-17)
• Transparency International CPI: 78/100, rank 8 (present, as of 2025)

Evidence freshness

• FATF monitored-jurisdiction status: current; data 2026-06-19
• FATF mutual evaluation and follow-up ratings: current; data 2026-07-31; follow-up 2023-09; base assessment 2023-09
• World Bank governance indicators: current; data 2024
• UN, UK, EU and US sanctions regimes: current; data 2026-08-13

Contextual signals are public evidence only and do not change the immutable v2 score.

Download evidence PDF · CSV · JSON

Regional peer scores

• Belarus: 6.0/10 (High)
• Bosnia and Herzegovina: 6.0/10 (High)
• Bulgaria: 6.0/10 (High)
• Monaco: 6.0/10 (High)
• Montenegro: 6.0/10 (High)
• Russia: 6.0/10 (High)

Source: FATF black & grey lists · World Bank WGI (CC BY 4.0 — World Bank WGI) · TI CPI (CC BY-ND 4.0 — Transparency International, display only)