We met with Thierry Grosjean, Chairman of the Luxembourg Association of Compliance Officers (ALCO). Interview.

 

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What will ALCO be focusing on in 2017?

As you know, ALCO is made up of different active working groups which produce reports and publications throughout the year. We’re currently setting up a new group which will focus on data protection in the compliance sphere. Our next

report will cover the role of compliance officers in

management companies. In addition, we publish the association’s magazine “Le Bulletin” twice a year. Our magazine and the output of our working groups ensure a steady flow of information on compliance in Luxembourg. We’re actively involved in roundtable events with other

associations within the financial sector in Luxembourg and we often co-organise events with them to establish common dialogues and frameworks. In November 2016, we partnered with the ALJB – Association Luxembourgeoise

des Juristes de Droit Bancaire (Luxembourg Association of Banking Law Lawyers) – and we want to continue developing our close ties with organisations including the ABBL, ALFI, ALRiM, ILA and IIA. Similarly, ALCO wants to strengthen the dialogue and relationship it has with state bodies. We’ve recently collaborated on a consultative basis with the CSSF and CRF on Circular 17/650, relating to compliance. The state increasingly looks to professional associations such as ALCO for members’ hands-on experience in matters relating to processes and regulations.

 

How is your industry resonding to new compliance legislation?

The current trend in the industry is preventative statements in a bid to protect the industry’s own interests in terms of DUKE  08 BUSINESS 38  I 39

compliance risks. This is the opposite of a visionary attitude and only leads to missed opportunities. At a legal level, the beauty of the task lies in its complexity. A holistic approach should therefore be used to identify risks and opportunities. We’re coming to the end of pure and simple compliance and we’re evolving towards smarter legislation. However, European legislators continue to throw a spanner in the works in their attempt to create more European regulations. Opening a bank account in Luxembourg can sometimes take up to two months: a considerable, unhelpful

administrative burden. Total transparency can be very positive from a fiscal stance, but some legal discretion may be necessary on the business point of view to ensure that certain economic information is not disclosed – provided, of course, that there is no fraudulent intent. By seeking to 

make the EU's common market more transparent through over-regulation, the European Union risks cutting itself off from some potential investors. Compliance must therefore keep pace with market developments.

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« At a legal level, the beauty of the task lies in its complexity. »

 

 

How do you see the future of compliance in relation to technological advances?

There’s already been considerable discussion and analysis of how technology will interact with the finance world. There’s a good range of software options which can be used in terms of KYC - Know Your Customer - compliance, focused on anti-money laundering and terrorist activity monitoring. New software and tools are available to make it

easier to report suspicions. For instance, the Financial Intelligence Unit of the State Prosecutor's office to the Luxembourg District Court - FIU - has put together a secure and simplified submission system (goAML). We’ve witnessed a substantial increase in compliance regulation and technology has supported compliance officers through the changes within the sector. However, compliance officers have to continue thinking about the way in which information is collected and analysed by software. They have to understand every single process in order to provide transparent and precise ad hoc analysis. This is especially important when it comes to the transposition of the new 4th Anti-Money Laundering Directive - AMLD and particularly the implementation of the “Tax Crime” as a primary infraction.