Letting offices is not a corporate service: who is a trust and company service provider under the AML Law of 12 November 2004, and the AED’s fining power (Tribunal administratif 2021 and Cour administrative 2021)

The judgments

The question

Luxembourg’s AML Law of 12 November 2004 does not apply only to banks, auditors and lawyers. Through a residual category, it also reaches any person who, in the course of business, provides certain services to companies: forming them, acting as their directors or nominee shareholders, or giving them a registered office, an address or business premises together with related services. These trust and company service providers fall, unless another body supervises them, under the supervision of the Administration de l’enregistrement, des domaines et de la TVA (AED), which inspects them on site and can fine them for failing to carry out a risk assessment, customer due diligence and the other professional obligations of the Law.

The boundary of that category matters to a large group of businesses that do not think of themselves as regulated at all: property companies that let office space, groups that sublet unused floors to third parties, landlords who throw in internet access, a meeting room and the distribution of mail. If they are trust and company service providers, they must have an AML framework; if they are not, an AED fine has no legal basis. This review analyses the one pair of decisions on that boundary in our sources: the judgment of the Tribunal administratif (Administrative Tribunal) of 2 April 2021, no. 43422, and the judgment of the Cour administrative (Administrative Court of Appeal) of 26 October 2021, no. 45967C, which confirmed it on a different ground. Both annulled a fine of €1,000 imposed by the director of the AED on a property company. The appeal also contains the State’s request, which the Court refused, for a reference to the Court of Justice of the European Union on the meaning of the corresponding provision of Directive (EU) 2015/849.

The legal framework

Who is a trust and company service provider

Article 2(1) of the AML Law lists the persons to which Title I of the Law, containing the professional obligations, applies. Points 1 to 13 name defined professions: credit institutions and professionals of the financial sector, insurers, investment funds, auditors, chartered accountants, real estate agents, notaries, bailiffs, lawyers and tax advisers. Point 13bis then adds, as a residual category, the persons other than those listed above who carry on in Luxembourg the activity of a trust and company service provider. Real estate agents under point 10 are covered, including when they act as intermediaries in the letting of immovable property, but only in relation to transactions for which the monthly rent amounts to €10,000 or more; the Cour administrative relied on that threshold.

The activity itself is defined in Article 1(8). A trust and company service provider is any natural or legal person that provides one of five services to third parties: (a) forming companies or other legal persons; (b) acting as director, secretary, partner or in a similar position, or arranging for another person to do so; (c) providing a registered office, a business, administrative or correspondence address or business premises and any other related service for a company, a partnership, any other legal person or any other similar legal arrangement; (d) acting as fiduciary or trustee, or arranging for another person to do so; and (e) acting as nominee shareholder, or arranging for another person to do so. The case turned entirely on point (c).

The AED’s fine was based on alleged breaches of Article 2-2 (the obligation to identify, assess and understand money laundering and terrorist financing risks) and Article 3 (customer due diligence). Both courts summarised Articles 2-2, 3, 4 and 5 as laying down, respectively, an obligation to carry out a risk assessment, a customer due diligence obligation, an obligation of adequate internal organisation and an obligation to cooperate with the authorities.

The AED as residual supervisor and its sanctioning powers

Supervision is allocated by Article 2-1. The CSSF and the Commissariat aux Assurances supervise the financial and insurance sectors (paragraphs 1 and 2); the self-regulatory bodies of the auditors, chartered accountants, notaries, lawyers and bailiffs supervise their members (paragraphs 3 to 7); and under Article 2-1(8) the AED is the supervisory authority for all professionals not referred to in paragraphs 1 to 7. A trust and company service provider under point 13bis that is not a member of a supervised profession therefore falls to the AED. The courts did not discuss Article 2-1; the AED’s competence over trust and company service providers was not in dispute, only whether the company was one.

The power to sanction is in Article 8-4(1): the supervisory authorities may impose the sanctions and measures listed in paragraph 2 on the professionals subject to their supervision “in accordance with Article 2-1” that fail to comply with the professional obligations, and on their managers and other responsible persons. Article 8-4(2) lists a warning, a reprimand, a public statement, the withdrawal or suspension of a registration or authorisation, temporary bans (for the CSSF and the CAA), and, in point (f), administrative fines of up to twice the benefit derived from the breach where it can be determined, or up to €1,000,000. The director of the AED applied point (f). The criteria for fixing the type and level of a sanction are in Article 8-5(1), which includes previous breaches by the person held responsible; the quantum was not contested in this case.

Against decisions of a supervisory authority under this chapter, Article 8-7 opens an appeal with full jurisdiction (recours en pleine juridiction, also called recours en réformation) to the Tribunal administratif, to be lodged within one month of notification of the decision, failing which it is time-barred. Both the director of the AED, in his decision on the internal appeal, and the Tribunal quoted that provision in the same terms as our current text.

The structure of the Law therefore makes the definition decisive. The obligations of Articles 2-2 to 5 bind “professionals”, which Article 1(24) defines as all the persons referred to in Article 2; the AED’s power to fine under Article 8-4(1) exists only towards professionals subject to its supervision. A person outside Article 2(1) cannot breach those obligations, and a fine imposed on it is unlawful whatever the state of its compliance.

The wording the courts applied and the current text

The Tribunal applied the Law as in force at the time of the facts, before the amendments of 25 March 2020 and 25 February 2021 (p. 10). Both courts quoted Article 1(8) and Article 2(1), point 13bis, in a wording that differs from our translation, which follows the consolidation of 8 August 2026:

• “À titre professionnel”. In the version quoted by both courts, Article 1(8) covered a person who provides the services “à titre professionnel” (in a professional capacity), and point 13bis covered persons who carry on the activity “à titre professionnel” in Luxembourg. The current French text of both provisions reads instead “au titre d’une relation d’affaires”, “in the course of a business relationship”, as our English now renders it. A business relationship is defined in Article 1(13) as a business, professional or commercial relationship connected with the professional activities of the persons subject to the Law and expected, when the contact is established, to have an element of duration. The judgments do not say when or why the wording changed. The Cour administrative’s decisive reasoning rests on the old words.
• “Et tout autre service lié”. The version quoted by the courts required the provision of a registered office, an address or business premises “et tout autre service lié” (and any other related service). The current text of point (c) reads “et, le cas échéant, tout autre service lié”, which our translation renders as “and, where applicable, any other related service”. Both courts treated the related service as a condition in addition to the premises; the Cour administrative called it a “condition légale additionnelle” (p. 9). Whether the inserted words “le cas échéant” mean that premises alone can now suffice is a question neither judgment addresses.
• Points (b) and (e). The courts’ version of point (b) referred to acting as “directeur” or secretary of a company, and point (e) excluded acting as shareholder for a company listed on a regulated market subject to adequate disclosure requirements. The current text of point (b) lists the positions of executive officer (directeur), manager, director, member of the management board and secretary, and point (e) no longer contains the listed-company exception. Nothing in the case turned on either point.
• Article 8-4(1). The courts quoted the list of obligations whose breach may be sanctioned as Articles 2-2, 3, 3-1, 3-2, 3-3, 4, 4-1 and 5. The current text adds Article 7-1(2) and (6), Article 7-2(1) and Article 8-3(3). Article 7-2(1) is the obligation of trust and company service providers to register with their supervisory authority or self-regulatory body; under Article 7-2(5) registration of natural persons with the AED is conditional on adequate professional good repute. Failure to register is therefore, on the current text, itself a sanctionable breach. Neither judgment mentions Article 7-2.

The Tribunal also recorded one earlier change. The Law of 13 February 2018, which transposed Directive (EU) 2015/849, added “locaux professionnels” (business premises) to point (c), in order, according to the explanatory memorandum to bill no. 7128 (p. 32) cited by the Tribunal, to ensure consistency with the definitions in the Directive (pp. 12–13). The director of the AED, in his decision on the internal appeal, still quoted point (c) without the words “business premises” and with “société en commandite” (limited partnership) in place of “société de personnes” (partnership).

The facts and the AED’s decisions

The company and its leases

The company is a Luxembourg société à responsabilité limitée. The Tribunal’s judgment blanks its name entirely; the Cour administrative designates it as “...P... s.à r.l.”, and we call it company (P). It was incorporated on 27 September 2016 with the corporate object of “the purchase, sale, letting, management and development of all real property situated in the Grand Duchy of Luxembourg or abroad”, and, on its own account, its main activity was holding and letting one building. It belongs to a group operating mainly in maritime transport and the oil and gas industry, which includes three other Luxembourg companies (Tribunal, p. 4). According to the AED’s inspection report, as quoted by the Court, company (P) was created to manage properties intended for the group, the offices were acquired for the group’s companies, and two offices were let to third parties because the space occupied by company (P) had proved too large (Cour administrative, p. 8).

On 2 June 2017 company (P) concluded two commercial leases: one with a private individual, Mr (Y), and one with a company, (V). It also let some offices to the group’s own companies (Tribunal, p. 4). The Tribunal found it undisputed that company (P) let, for office purposes, two individualised rooms on the fifth floor of its building, not used by it or by the group, to a natural person and a legal person outside the group (p. 12). The Court added the figures: the offices measured 13 m² and 12 m², each was let for a monthly rent of €1,300, and nothing additional was charged for any other service (p. 8). The leases provided for “utilities” at no additional cost: access to the internet over a shared wifi network, hot and cold drinks, a meeting or conference room, a kitchenette, and a shared printer with paper and ink (Tribunal, pp. 6, 12).

Two further facts were before the Tribunal. At the natural person’s request, his lease was amended to give him a larger office and to allow him to sublet it to his own companies; company (P) argued that whether those companies then established their registered office at the address was a matter of separate arrangements to which it was a stranger (p. 7). And a company tenant had not established its registered office in the let office, as an extract from the Trade and Companies Register showed (p. 6). By the time of the appeal, one of the two leases had been terminated (Cour administrative, p. 9), and company (P) described the company tenant as a former group company that now had its own telephone line and internet connection (p. 6).

The mail arrangement became the main point of contention. Company (P) had two letterboxes in the main hall of the building, one used by the group and the other made available to the tenants. To prevent one tenant from accessing the other’s mail, the key was held by a group employee, who brought the mail up to the offices and handed it to each tenant, without opening, reading, scanning, copying or otherwise handling it. Company (P) described this as a temporary practical arrangement and said it was discussing with the building’s management company the installation of additional letterboxes (Tribunal, pp. 8–9). Company (P) itself had no employees; the other group companies employed, respectively, three persons (one full-time, two at four-fifths), two persons at one-fifth, and one full-time employee (p. 8).

The inspection, the report and the fine

On 15 March 2019 the AED carried out an on-site inspection at company (P)’s premises. Its report of 19 March 2019, drawn up by the inspectors of its anti-fraud service, concluded that company (P) had not complied with Articles 2-2 and 3 and proposed an administrative measure or sanction under Article 8-4 (Tribunal, p. 1). Page 7 of the report described an activity of letting offices with the following services: kitchenette access, cold and hot drinks, internet and telephone access, printers with paper and ink, and the distribution of mail by company (P) (p. 2).

By letter of 24 April 2019 company (P) confirmed these services but stated that it provided no telephone line; it also contested the report’s statement that it operated a business centre, explaining that the business centre in the building was linked to a company that owned the third floor and had no connection with it (pp. 3–5). According to the government’s representative, the inspectors corrected point 5 of the report (“description of the professional’s activity”) to state that telephone calls were handled by the clients themselves; the Tribunal recorded, without contradiction from company (P), that the statements about the telephone line and the business centre no longer appeared in the AED’s final report (pp. 9–10).

By decision of 15 May 2019 the director of the AED imposed on company (P) a fine of €1,000 under Article 8-4(2)(f). The decision cited Article 2, point 13bis, as making persons who carry on the activity of a trust and company service provider in Luxembourg subject to Articles 2-2, 3 and following, 4 and following, and 5, referred to the inspection, and concluded from the facts in the report that company (P) did not comply with its professional obligations (pp. 1–2). The report was sent to company (P) together with the fine.

The internal appeal

Company (P) lodged an internal appeal (recours gracieux) through its lawyer on 28 June 2019. The director rejected it on 9 July 2019. As a trust and company service provider within the meaning of Article 1(8), he wrote, the company was bound by the AML obligations; the report had described the facts establishing the breaches of Articles 2-2 and 3, and those facts “are assessed on the very day of the inspection”. Point (c) of Article 1(8) covered the provision of a registered office or address and any other related service; the report described office letting with kitchenette, drinks, internet and telephone, printers and mail distribution, which company (P) had confirmed except for the telephone line; “consequently, the company falls within the scope” of the Law (pp. 2–3).

The director added three points of practical interest. He drew attention to Article 8-7 and the one-month appeal to the Tribunal administratif. He warned that the AED’s anti-fraud inspectors might carry out a second inspection to assess the measures taken to comply, and that if breaches were again found this would be regarded as recidivist behaviour and would increase the sanction. And he referred company (P) to the Law as amended by the Law of 13 February 2018 and to the AED’s “Blanchiment” pages, which provide guidance for professionals (p. 3).

The Tribunal administratif, 2 April 2021 (no. 43422)

Jurisdiction and admissibility

Company (P) applied to the Tribunal on 9 August 2019, principally for reformation and in the alternative for annulment of both decisions. The fourth chamber held that, since the decisions were based on Article 8-4(2)(f) and Article 8-7 provides for an appeal with full jurisdiction, it had jurisdiction to hear the principal application for reformation, so that there was no need to rule on the alternative application (p. 3).

The government’s representative had stated that he left admissibility as to time limits and form to the court’s discretion (se rapporter à prudence de justice). The Tribunal recalled that such a statement amounts to a challenge, but that an unsupported challenge must be dismissed, as it is not for the administrative judge to make up for the parties’ failings and search for the legal grounds that could have supported their position. As the government had not specified how the time limit or the form had been disregarded, and the Tribunal saw no ground of inadmissibility to raise of its own motion, the application was admissible (pp. 3–4).

The company’s grounds

Company (P) left the external legality of the decisions to the court’s discretion and argued two grounds (pp. 4–9).

Error of fact. Despite its clarifications, the AED had wrongly stated that company (P) provided a telephone line, which could not have been verified on site, and wrongly attributed to it the activity of a business centre run by an unrelated company.

Error of law. Company (P) was not a trust and company service provider within Article 2(1), point 13bis, and Article 1(8), nor a domiciliation agent (domiciliataire) under Article 1(1), point 6, of the amended Law of 31 May 1999 governing the domiciliation of companies, two notions it said were often confused. Its arguments were these:

• the decisions did not identify which service under Article 1(8) it supposedly provided; nothing pointed to points (a), (b), (d) or (e), and only point (c) could be discussed;
• the Tribunal’s judgment of 30 May 2018, no. 39088, had held that concluding a commercial lease does not necessarily and automatically amount to providing a registered office or a business, administrative or correspondence address, even if the tenant could potentially establish such an office or address in the premises; in that case the office space had been fitted with partitions, cabling and a kitchenette, and the tenant could put up advertising signs, all of which were accessory to the lease;
• the services here (wifi, kitchenette and drinks, meeting room, shared printer) were intrinsically linked to letting an office, under the maxim accessorium sequitur principale: a space shared by several companies typically has one kitchen and one meeting room. The words “any other related service” did not themselves define which services count and could not on their own trigger the Law;
• the leases gave exclusive use of a real office; they were not domiciliation contracts under which a provider lets an office without exclusive enjoyment. Its corporate object did not mention any service under Article 1(8);
• point 13bis requires the activity to be carried on “à titre professionnel”. The decision to let spare offices was driven by the availability of unused space, not by a wish to expand its business; it had taken no steps to promote the activity or to let the remaining offices profitably. A natural person cannot establish a registered office, so services to him could not be services to companies;
• relying on CSSF circular 02/69 on the Law of 31 May 1999, the aim of that Law was to curb letterbox companies, and a “seat” exists as soon as a third party makes a Luxembourg address available to a company for use as its own address, the physical presence being reducible to a letterbox or a telecommunications installation. Relying on the parliamentary materials quoted in the 2018 judgment, point 13bis was a residual category whose reach was uncertain;
• a judgment of the Cour d’appel (Court of Appeal), fourth chamber, sitting in commercial matters, of 16 December 2015, no. 40444, distinguished a lease, which is limited to making property available, from a services contract involving a business address and offices, reception of visitors, a telephone answering service, dedicated telephone lines, daily cleaning and other services; where letting is combined with services, the dominant element decides. Indications such as cramped premises, deficient infrastructure, the number of people actually working on site and the activity of the companies concerned show whether there is domiciliation;
• company (P) had no staff, and the few employees of the group companies could not provide such services; the mail arrangement did not amount to providing a business, administrative or correspondence address to tenants entitled to use the address of their offices anyway.

The State’s answer

The government’s representative asked the Tribunal to dismiss the application (pp. 9–10). The AED had taken company (P)’s observations into account by correcting the report. Point 5 of the report explained the qualification: the cumulative conditions of providing business premises and related services were met because the leases mentioned “utilities” at no additional cost. The corporate object had only indicative value and could not alter the economic reality of the activity, which alone mattered. Company (P) wrongly concentrated on the registered office, while point (c) also covers a business, administrative or correspondence address and business premises, which here allowed the companies at the address to carry on their activity.

The representative conceded that a lease on its own could not bring a person within the Law, but argued that company (P) went beyond providing furnished or unfurnished premises without added value: it provided related services that made the professional activity possible, above all the distribution of mail, since in principle any company free of services should not only have its own letterbox but also manage its correspondence itself. Drinks, printing paper and the maintenance of a printer also required human management. Yet the representative stated that he left the interpretation of the notion of “related service” to the court’s discretion (p. 10). He finally argued that domiciliation and trust and company services must not be confused, and that company (P), which, unless shown otherwise, was not among the professionals authorised to provide domiciliation services under the Law of 31 May 1999, could not recast a services contract as a domiciliation contract.

The tribunal’s analysis

Scope of the dispute. The Tribunal first narrowed the case. Apart from the statements on the telephone line and the business centre, which were no longer in the final report, company (P) contested neither the facts underlying the fine nor its amount. The dispute concerned only the principle of a sanction: whether company (P) fell within the scope of the Law at all (p. 10).

Applicable law. In a reformation appeal the court considers the facts and the law as they stand when it rules, taking account of changes since the decision. However, under the principle of non-retroactivity in Article 2 of the Civil Code, the scope of the Law and the qualification of the facts as breaches that may lead to an administrative sanction had to be assessed under the Law as in force at the time of the facts, that is before the amendments of 25 March 2020 and 25 February 2021 (p. 10).

The provisions and the issue. After quoting Article 8-4(1) and (2), Article 2(1), point 13bis, and Article 1(8), the Tribunal identified the disagreement: whether company (P) fell within point (c) (pp. 11–12). Both parties accepted that letting a commercial office, even furnished, to another company did not on its own amount to a service under point (c). They disagreed on the qualification of the free accessories to the leases, and on the fact that the tenants had, at least for the time being, to share a single letterbox, so that company (P) collected and distributed their mail (p. 12).

The 2018 line of case law. Citing its judgment of 30 May 2018, no. 39088, the Tribunal held that concluding a commercial lease does not necessarily and automatically amount to providing a registered office or a business, administrative or correspondence address. Even if the tenant can potentially establish such an office or address in the premises, that alone is insufficient, in the absence of other services going beyond mere letting, “such as the provision of a common secretariat or reception”, to qualify the landlord as a trust and company service provider (p. 12). That case law was decided on the version before the Law of 13 February 2018, but remained valid, because the amendment had only added “business premises” to point (c) (pp. 12–13).

What “any other related service” means. The Tribunal then defined the notion on which the case turned. It observed, following the 2018 judgment, that the services under points (a) to (e) have in common that they are services linked to a company, and continued:

Even though the deliberately imprecise wording “any other related service” is certainly intended to widen the scope of point (c) of Article 1(8) of the Law of 12 November 2004 as far as possible, the service in question must nevertheless not only be actually linked to the provision of a registered office or of a business, correspondence or administrative address, but also, in view of the nature of the other points of Article 1(8), be such as to contribute actively to the very statutory functioning of a company, a service without which the company could not function, as opposed to any service whatsoever that is merely useful to the company’s activity.

Otherwise, the Tribunal added, the exhaustive list of persons within the scope of the Law would lose its meaning (p. 13).

The utilities. Applying that test, the “utilities at no additional cost” in the two leases were not services under point (c) but mere accessories of the main object of the contracts. The 2018 judgment had already held that partitions, cabling and a kitchenette do not take a contract beyond the mere letting of office space. The use of the common parts of a building, the network and the pre-installed technical facilities was purely accessory, all the more so because company (P) and the other group companies were present in the same building and let the tenants share their own facilities. The same applied to drinks and printer consumables, which company (P) organised for its own account, like electricity and heating, and whose enjoyment was part of the consideration for the agreed rent. The government’s argument that the need for human management implied a separate services contract was therefore not conclusive (pp. 13–14).

The mail. The collection and distribution of mail did not change the conclusion, because it had not been established that the activity included the actual management of correspondence on the tenants’ behalf; it could not therefore be qualified as a service under point (c) in the way that, for example, a common secretariat or reception could (p. 14).

Conclusion. It did not follow from the file that company (P) carried on an activity within the scope of the Law; the director had therefore wrongly fined it. The application was well founded, without any need to rule on the other arguments, in particular those on the domiciliation legislation, which the Tribunal described as not relevant to the case (p. 14). The Tribunal did not address company (P)’s argument that it did not act “à titre professionnel”.

Outcome and costs

Within the reformation appeal, the Tribunal annulled the director’s decision of 15 May 2019 and the confirmatory decision of 9 July 2019 for breach of the law, held that there was no need to rule on the alternative application for annulment, and ordered the State to pay the costs (frais et dépens) (pp. 14–15). No indemnité de procédure is mentioned.

The Cour administrative, 26 October 2021 (no. 45967C)

The State’s grounds of appeal

The State, represented by the government’s representative under a mandate from the Minister of Finance of 27 April 2021, appealed on 30 April 2021. Company (P) filed its reply on 31 May 2021 and the State a rejoinder on 28 June 2021; the case was argued on 7 October 2021. The State put forward four lines of argument and, in the alternative, a request for a reference (Cour administrative, pp. 5–6).

A broad reading of point (c). Any person who, actively or passively and in a professional manner, provides third parties with either a registered office, a business address, an administrative address, a correspondence address or business premises, and any related service of whatever nature, is a trust and company service provider. Exercising an activity “à titre professionnel” means, according to the State, carrying it on in a highly competent, sophisticated, meticulous and organised manner, lasting over time and intended to generate turnover, as opposed to an activity carried on by a layman or amateur.

No artificial splitting. The Tribunal had read point (c) by artificially separating its parts. On the State’s reading, company (P) (i) was a natural or legal person, (ii) provided services to third parties in a professional capacity, (iii) provided business premises to third parties and (iv) also provided related services: an equipped kitchen, self-service hot and cold drinks, high-speed internet and a telephone line, free use of a printer and mail distribution. The cumulative conditions were therefore met. The list repeated the telephone line, although the Tribunal had recorded that the AED’s final report no longer relied on it.

No principal and accessory distinction. The Law is silent on any distinction between a “principal” and an “accessory” activity. A single additional or complementary service to a client to whom premises are provided suffices.

Inherent and comfort services. The State further proposed to distinguish between services inherent in and indispensable to peaceful letting, such as heating and water, maintenance of the common parts and putting out the bins, and related services that are not indispensable and may be called comfort or even luxury services, such as cleaning of the private parts, telephone and mail services, internet access and the option of a specific electricity supplier. Company (P)’s services fell into the second group.

A reference to the Court of Justice. Finally, and in the alternative, the State pointed out that Article 1(8)(c) transposes Article 3(7)(c) of Directive (EU) 2015/849. If the Court did not share its reading, a question of interpretation of secondary EU law would arise, and the Court should make a reference for a preliminary ruling under Article 19(3)(b) TEU and Article 267 TFEU, with several questions on Article 3(7)(c) of the Directive (p. 6).

The company’s reply

Company (P) asked for the judgment to be confirmed outright (pp. 6–7). It said it was not a fiduciary, an accounting firm, a professional of the financial sector, a domiciliation company, a company whose main activity is letting property, a trust and company service provider, or a company assisting third-party companies in their activities. It held a single building that served as the seat of several group companies, and had concluded two leases. It denied providing services to third parties in a professional capacity: it had neither the human nor the technical means to provide a dedicated professional service, and it received nothing beyond the rent.

On the State’s reading, company (P) argued, every owner who lets premises to a company and includes heating, electricity, furniture, parking supervision or the bins in the service charges would fall within the Law. The aim of the Law was to place its obligations on structures that let or domicile on a professional basis, as an economic activity, offering services such as providing directors, managing mail, dealing with administrations and banks, preparing accounts, tax follow-up, filings with the Trade and Companies Register and the Register of Beneficial Owners, or handling telephone calls. Neither the European nor the national legislature intended to subject all simple office letting to the Law, and the services here were courtesy services it had chosen to share. The proposed preliminary questions were irrelevant, because qualifying a person as a trust and company service provider is a matter for the national judge and depends on facts requiring no further interpretation.

The Court’s reasoning: no activity “à titre professionnel”

After quoting Article 1(8), Article 2(1), point 13bis, and Article 8-4(1) and (2), the Court read them together: the administrative sanctions target a number of persons listed in Article 2(1), among them credit institutions and professionals of the financial sector, insurance professionals, investment funds, auditors and accountants, property developers, notaries, bailiffs and lawyers, as well as the residual category of point 13bis (pp. 7–8). The definition in Article 1(8), the Court said, requires first that the person provide its “prestation” “à titre professionnel”, which company (P) disputed, and, if so, that it also provide one of the services in points (a) to (e), which company (P) also disputed (p. 8).

The Court decided the case on the first condition. It took the facts from the documents and from the AED’s own inspection report (company (P) created to manage properties for the group, the offices acquired for the group, two offices let to Mr (Y) and to (V) because company (P)’s space was too large) and concluded:

In view of these established facts, the Court concludes that by letting two office spaces of 13 m² and 12 m² respectively, which had become free and were unoccupied, each for a monthly rent of €1,300, without charging any additional amount for any other service, company (P) did not carry on a letting activity as a professional, that is to say as a habitual activity, but rather on an occasional basis.

It followed that the existence and assessment of the provision of accessory services, an “additional legal condition”, had become superfluous (surabondante) in this case (p. 9). The Court therefore neither endorsed nor rejected the Tribunal’s test of a service contributing actively to the statutory functioning of a company, or the State’s distinction between inherent and comfort services.

The Court added a systemic argument. Under Article 2(1), point 10, real estate agents fall within the Law as intermediaries in the letting of immovable property only for transactions with a monthly rent of €10,000 or more, which excludes lettings at lower rents, “which is precisely the case here” (p. 9). The Court did not develop the point. Read in context, it supports the conclusion that the Law, which leaves professional letting agents outside its scope below that threshold, was not meant to catch an occasional landlord letting two small offices at €1,300 a month.

Its conclusion was that the file did not show that company (P), by the mere conclusion of two leases for two office spaces for which it declared it had no own need, a fact not effectively contradicted, one of which had since been terminated, had carried on “à titre professionnel” an activity of trust and company service provider within the scope of the Law; the director had therefore wrongly fined it (p. 9).

The request for a reference to the Court of Justice

The State’s request failed for want of relevance:

As the Court has just concluded that company (P) is not subject to the scope of the Law of 12 November 2004, no question of interpretation of a rule of secondary Community law arises, so that the preliminary questions to the Court of Justice of the European Union suggested by the State are devoid of relevance.

The Court did not discuss whether, as company (P) argued, qualification is a matter for the national judge, nor did it say anything about the content of Article 3(7)(c) of the Directive. Because the case was decided on the “à titre professionnel” condition, the meaning of “related service”, the part of the definition the State wanted referred, never had to be resolved.

Outcome and costs

The Court declared the appeal admissible, dismissed it as unfounded in all its aspects, confirmed the judgment of 2 April 2021 and ordered the State to pay the costs of the appeal (dépens de l’instance d’appel) (p. 9). No indemnité de procédure is mentioned. The result is that the fine of €1,000 and the confirmatory decision remain annulled.

How the two decisions fit together

The two courts reached the same result by different routes, and the difference matters for anyone relying on them.

Two conditions, two answers. Article 1(8), in the version applied, contains two conditions: the services must be provided “à titre professionnel”, and they must be one of the services in points (a) to (e). The Tribunal decided on the second condition and did not address the first, although company (P) had raised it. The Cour administrative decided on the first condition and expressly left the second aside. The judgment of the Court therefore does not confirm the Tribunal’s reading of “any other related service”; it confirms only the result. The Tribunal’s test, a service that contributes actively to the statutory functioning of a company and without which it could not function, remains a first-instance interpretation, consistent with the Tribunal’s earlier judgment of 30 May 2018 as cited, but not approved on appeal.

What “professional” meant to the Court. The State argued for a demanding notion of professionalism (competent, sophisticated, organised, durable, aimed at turnover) and then argued that company (P) met it. The Court did not adopt that definition; it equated professional with “habitual” and contrasted it with “occasional”. The factors it relied on were all concrete: the offices had become free; they were small; there were only two; the rent was €1,300 a month and nothing extra was charged; company (P) had no need for the space; and one lease had already ended. The AED’s own report supplied the key facts, notably that the offices were let because company (P)’s space was too large. Company (P)’s absence of staff and of marketing, argued before the Tribunal, fits the same picture, though the Court did not list those points.

Accessory services and the lease. Both parties at first instance agreed that a bare lease is not a trust and company service, and the State never argued otherwise. The dispute was about what more is needed. The Tribunal set the bar high: a common secretariat or reception would qualify; shared facilities, drinks, a printer and the physical distribution of unopened mail would not. The State’s appeal argument that a single additional service suffices, and that the Law knows no distinction between principal and accessory, was not answered. The State’s fallback distinction between inherent and comfort services was also left open, as was the relationship between Article 1(8)(c) and the domiciliation regime of the Law of 31 May 1999, which the Tribunal declared not relevant.

The State’s hesitation. It is notable that, at first instance, the government’s representative left the interpretation of “related service” to the court’s discretion, while on appeal the State asked for a reference to the Court of Justice in case its reading was not shared. That sequence suggests the authority itself regarded the outer limit of point (c) as uncertain. The Court’s decision means that uncertainty was not resolved by either court in Luxembourg or by the Court of Justice.

The effect of the current wording. Both pillars of the decisions rest on wording that our current text no longer contains. The Cour administrative’s reasoning turns on “à titre professionnel”, while the current Article 1(8) and point 13bis say “au titre d’une relation d’affaires”, a notion defined by reference to a relationship expected to have an element of duration. A lease of an office for an indefinite period is, at least arguably, a relationship of some duration, so the Court’s contrast between habitual and occasional letting may not carry over automatically; the judgments give no guidance on the point. The Tribunal’s and the Court’s treatment of the related service as a cumulative condition rests on “et tout autre service lié”, while the current text adds “le cas échéant” (“where applicable”). On its face that insertion weakens the argument that premises without any related service fall outside point (c), but neither decision deals with it and we have no later judgment in our sources that does.

What it means in practice

For property companies, family holding structures and groups that let spare office space to outsiders, the decisions give useful arguments, but on facts that were favourable and under an older wording. The points the courts found decisive, or that the parties fought over, suggest what an inspection will look at:

• Is the letting habitual or occasional? The Court relied on the number of offices, their size, the fact that they had become free, the rent of €1,300 a month, the absence of extra charges and the landlord’s lack of need for the space. A business that markets serviced offices, lets many units, or charges separately for services will not be in the same position. Under the current wording, the question may instead be whether there is a business relationship with an element of duration.
• What exactly is provided beyond the premises? The Tribunal distinguished shared facilities that come with the building (wifi, kitchenette, meeting room, printer, drinks), which are part of the rent, from services that support the tenant’s corporate functioning, giving a common secretariat or reception as examples. Mail collection without opening or handling the post did not count; managing correspondence on the tenant’s behalf might.
• Who uses the address as a registered office? The fact that a company tenant had not established its registered office in the let office, shown by a Trade and Companies Register extract, was part of company (P)’s case. Permitting a tenant to sublet to his own companies was raised but not decided.
• The corporate object is not decisive. The State argued, and nothing in either decision contradicts it, that the economic reality of the activity matters, not the wording of the articles of association.
• Correct the inspection report early. Company (P)’s letter of 24 April 2019 led the AED to drop the telephone line and the business centre from its final report, which narrowed the dispute. The director stated that the facts are assessed on the day of the inspection.
• The deadline is short. The appeal to the Tribunal administratif under Article 8-7 must be lodged within one month of notification. Company (P) first used an internal appeal; the Tribunal treated the application, lodged on 9 August 2019 against both the decision of 15 May 2019 and the rejection of 9 July 2019, as filed within the time limit.
• Recidivism. The director warned that further breaches found at a second inspection would be treated as recidivist and increase the sanction; Article 8-5(1) lists previous breaches among the sanctioning criteria.
• Genuine providers have more to do now. A business that does provide registered offices, addresses or premises with related services is, under the current text of Article 7-2, required to register with its supervisor, for natural persons supervised by the AED subject to professional good repute, and Article 8-4(1) now makes failure to register a sanctionable breach.

Documents worth keeping, judging by what the parties put before the courts: the leases and any amendments, including the clause on “utilities” or service charges; evidence that no separate fee is charged; a description of how mail is collected and distributed; Trade and Companies Register extracts showing where tenants have their registered office; staff numbers; evidence of why the space is let (for example, that it is surplus to the group’s needs); and all correspondence with the AED, including observations on its inspection report.

Status

The Cour administrative confirmed the Tribunal’s judgment on 26 October 2021, so the AED’s fine of €1,000 and the decision on the internal appeal stand annulled. There is no later decision in the case among our sources, and no reference was made to the Court of Justice, so the meaning of “any other related service” in Article 3(7)(c) of Directive (EU) 2015/849 was not clarified. Our current text of the AML Law, consolidated on 8 August 2026, differs from the version the courts applied in the respects set out in the legal framework above, notably the business-relationship wording of Article 1(8) and point 13bis, the words “where applicable” in Article 1(8)(c), and the registration obligation of Article 7-2(1) now listed in Article 8-4(1).

Provisions discussed

• AML Law: Art. 1, Art. 2, Art. 8-4, Art. 8-7

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How to cite

Case law review by BCA EU, for information. Quotations from the judgments are our translations; only the original texts published by the courts are authoritative. Judgments checked on the official sources on 30 October 2026. This page is not legal or tax advice.