2 /5 – 2010 – Luxembourg notary was fined EUR 5000 for not performing sufficient due diligence

1. In a 04 May 2010 Luxembourg District Court decision, a Luxembourg notary was fined EUR 5000 for not performing sufficient due diligence with respect to a Cyprus company, in violation of Articles 3 and 9 of the Law of 12 November 2004, as amended. The court held that the notary knowingly did not perform the necessary due diligence to identify the natural person UBO of his client.
2. The notary had formed a Luxembourg private limited liability company (société à responsabilité limitée), the shareholder of which was a Cypriot company.
3. The notary had been asked to form the company by a Luxembourg law firm, and the Luxembourg law firm sent the notary a beneficial owner form for the Cypriot company, but the notary did not request further information.
4. Later, when the notary had to pass a deed of sale for the Luxembourg company, and he asked the law firm for further information on the UBO, the law firm refused to give him further information, stating that he had not asked for more when he formed the company.
5. The notary then reported the suspicious transaction to the FIU which investigated the matter and found that the notary had up to that time simply relied on the law firm’s UBO form when, not only did he form the company, but he also passed two capital increase deeds for it.
6. The court held that a notary forms companies as part of its professional responsibility, thus he failed in his professional duties when he did not perform the sufficient client due diligence.
7. Luxembourg District Court (Tribunal d’Arrondissement de et à Luxembourg) decision of 04 May 2010, docket number 1600/2010.

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