title: LU — Legal & Litigation (W7) | World Payments Monitor canonical: https://payments.gi/jurisdictions/luxembourg/w7/ ### W7 Legal & Litigation 1 gap limited signal Probable re-verified 2026-10-18 · changed 2026-09-21 Payments-relevant enforcement is driven by CSSF administrative sanctions (warnings, reprimands, fines, occupational bans, generally published) for AML/CFT and prudential breaches, without prejudice to criminal sanctions. A landmark Court of Appeal ruling of 26 February 2025 held criminal proceedings inadmissible following a final CSSF administrative fine on non bis in idem grounds, the CSSF sanction being deemed criminal in nature — a structural constraint on parallel double-prosecution. Historic enforcement includes 16 AML fines in 2021 (EUR 5,000–1,320,000) and a EUR 3m bank fine in 2024. Open gap — wpm-int-2 No LU-specific payments litigation movement (W7) located this cycle._Merchant-acquiring ops is a known under-indexed vector per methodology bias corrections._ Horizon · 2026-Q4 Current window PSD3/PSR transition window and re-authorisation_Current window_ Standing sub-brief · as of 27 June 2026 182 words · last cycle 2026-09-21 #### Legal & Litigation The landmark development is a 26 February 2025 ruling in which the Luxembourg Court of Appeal in chambers declared criminal proceedings against a financial institution inadmissible on non bis in idem grounds, finding the prior final CSSF administrative fine to be criminal in nature given its severity. This is a structural constraint on parallel double-prosecution following CSSF administrative fines, and it caps double-jeopardy exposure for Luxembourg-supervised firms, altering the enforcement-risk calculus where CSSF fines precede criminal action. The ruling applies across the supervised population — both bank-PSPs and non-bank PIs/EMIs — wherever a final CSSF administrative sanction has been imposed. It is an episode rather than a standing rule, but its precedential weight makes it a persistent feature of the enforcement-risk landscape. #### Outlook W7 is established around this single landmark ruling. The forward question is how broadly the non bis in idem principle is applied in subsequent matters — whether the severity-based characterisation of CSSF fines as criminal in nature is followed consistently. For supervised firms, the practical read is reduced parallel-prosecution exposure following final administrative sanctions. Trajectory: established. Periodic update · new data 2026-09-21 #### Legal & Litigation PSD3 and its accompanying Payment Services Regulation remain within the EU legislative pipeline, and no adoption was confirmed this cycle. The working expectation among market participants is that existing Luxembourg payment-institution and electronic-money-institution licences will be grandfathered pending re-authorisation once the package is formally adopted, though the specific mechanics of that grandfathering and re-authorisation process are not yet settled or confirmed. PSD3, once adopted, will require Member State transposition within eighteen months of its entry into force, which sets the outer boundary for when Luxembourg-specific re-authorisation requirements would need to take legal effect domestically. This is a watch-status item rather than a confirmed development: the legislative package's continued pendency means Luxembourg PI and EMI licence holders face forward-looking legal uncertainty about the eventual re-authorisation process, but no concrete transition requirement has yet crystallised into an actionable compliance obligation this cycle. Adoption of PSD3/PSR at the EU level is the trigger event to watch; once adopted, the eighteen-month transposition clock will begin running, and Luxembourg market participants should expect clarity on the specific grandfathering and re-authorisation mechanics to emerge only after that adoption, not before. **2 earlier distinct update(s)** Periodic update · new data 2026-09-14 #### Legal & Litigation A structural litigation-surface finding surfaced as backfill this cycle: the Luxembourg Court of Appeal, sitting in chambers, ruled in February 2025 that a prior final CSSF administrative fine was criminal in nature given its severity, barring subsequent criminal proceedings against the same financial institution on non bis in idem grounds. This is a Probable finding, and although it pre-dates this cycle's recency window, it is surfaced here because of its structural significance for how CSSF administrative sanctions interact with Luxembourg's broader criminal-enforcement architecture for payment and banking-sector firms. The practical implication is that a sufficiently severe CSSF administrative fine can now be characterised, at least by this chamber of the Court of Appeal, as criminal in substance rather than purely administrative -- which in turn triggers non bis in idem protection against a subsequent criminal prosecution covering the same underlying conduct. For payment institutions and banks operating under CSSF supervision in Luxembourg, this creates a meaningful boundary question: where CSSF elects to proceed by way of administrative fine, and that fine is severe enough to be characterised as criminal in nature, the door to a later or parallel criminal referral for the same facts may be closed. This is a litigation-surface development with direct relevance to how enforcement strategy is structured by CSSF and by prosecutors going forward, rather than an incident affecting a specific named payment firm this cycle. The item to watch is whether CSSF or Luxembourg prosecutorial authorities adjust their enforcement sequencing in light of this non bis in idem characterisation -- for instance, by front-loading criminal referral ahead of any administrative fine in cases where both routes are contemplated, to avoid this bar arising. Periodic update · new data 2026-09-05 #### Legal & Litigation A 26 February 2025 ruling of the Luxembourg Court of Appeal held that a final CSSF administrative fine is criminal in nature for non bis in idem purposes, rendering subsequent criminal proceedings on the same facts inadmissible (assessed confidence). This is a structural constraint on double-prosecution risk for Luxembourg payment and e-money firms facing both administrative and criminal exposure on the same conduct. Watch for whether this ruling is applied in a subsequent CSSF enforcement matter or cited in future Luxembourg case law on administrative-versus-criminal sanction characterisation. **Sources and findings (3 unique sources · R-3/R-4)** 1. [W7-E1] T3 Derived: Probable [in_force https://www.arendt.com/news-insights/news/landmark-ruling-in-aml-cft-criminal-proceedings-declared-inadmissible-following-cssf-sanction/](https://www.arendt.com/news-insights/news/landmark-ruling-in-aml-cft-criminal-proceedings-declared-inadmissible-following-cssf-sanction/) re-verified 2026-06-27 In a 26 February 2025 ruling the Court of Appeal in chambers declared criminal proceedings against a financial institution inadmissible on non bis in idem grounds, finding the prior final CSSF administrative fine to be criminal in nature given its severity. 2. [W7-E2] T1 Derived: Confirmed [in_force https://www.cssf.lu/en/anti-money-laundering-and-countering-the-financing-of-terrorism/](https://www.cssf.lu/en/anti-money-laundering-and-countering-the-financing-of-terrorism/) re-verified 2026-06-27 The CSSF holds broad sanctioning powers over AML/CFT-supervised persons including injunctions, warnings, reprimands, administrative fines and occupational prohibitions, which are generally made public and are without prejudice to criminal sanctions. 3. [W7-E3] T3 Derived: Probable [in_force https://www.loyensloeff.com/aml---luxembourg---mondaq-comparative-guide.pdf](https://www.loyensloeff.com/aml---luxembourg---mondaq-comparative-guide.pdf) re-verified 2026-06-27 In 2021 the CSSF imposed 16 AML-related fines on financial sector entities including payment institutions, ranging from EUR 5,000 to EUR 1,320,000, with shortcomings centred on name-matching, transaction monitoring, EDD and reporting failures.