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  • Writer's pictureMoyse & Associates

RETROSPECTIVE 2022: the new framework for dormant accounts and safes

2022 saw the implementation of one of the most notable laws in the banking sector. Circular CSSF 15/631 has been for a long time the main legal instrument in the field of dormant assets. After bitter discussions, it is finally the Law of 30 March 2022 on dormant accounts, dormant safe deposit boxes, and escheated insurance contracts, which came into force on June 1, 2022, that established a new legal framework for dormant accounts.

I. Scope of application

The new law applies more precisely to "any current account, savings account, time deposit account or account redeemable at notice, securities account, fiduciary deposit as well as all other accounts opened

with an institution in which the assets on behalf of the holders are individualized", opened with "any credit institution authorized in Luxembourg, any Luxembourg branch of a foreign credit institution as

well as the postal and telecommunications company...".

The inactivity of an account within the meaning of the law consists of the fact that no operation has been carried out on the account and that no activity by the account holder has taken place. If there is no transaction or event of any kind for a period of six years, the account or safe deposit box is considered inactive.

II. Treatment of inactive accounts and safes

The institutions covered by the law have an obligation of prevention, which must be achieved by maintaining regular contact with customers. To this end, it is essential that these institutions set up an adequate internal organization to identify inactive accounts and ensure their follow-up. If the account holder does not come forward, it is the responsibility of the institution to inform the account holder or his or her beneficiaries of the legal consequences of an inactive account or safe-deposit box. This initial information shall be sent by registered letter with acknowledgment of receipt if the account or safe-deposit box has been inactive for three or five years. The institution is obliged to provide this information within three months of the expiry of the above-mentioned periods.

If the account holder has not come forward, it is the responsibility of the institution to carry out additional - proportional - investigations in order to identify and inform the holder. If the account or safe-deposit box has been inactive for nine years, the institution is required to provide final information in the same way as the initial information.

III. Obligation to keep a record

The law imposes a deposit obligation on the institution when inactivity has persisted for a period of ten years. As for safes, they must be opened in the presence of a bailiff or a notary within three months

following the expiration of the ten-year period. An inventory is established at the time of the opening. The request for a deposit is made within three months following the expiration of the period for opening

the safe. The institution is required to deposit the funds with the Caisse de consignation (hereinafter “Consignment office”) within two months of being notified of the acceptance.

The Consignment office has a period of six months following the request or, if applicable, the communication of additional information to respond to the request. The institution is required to keep all the documents and information listed in Schedule 3 of the Law for the duration of the deposit and for five years following the end of the deposit. Retention allows the institution to respond to a request for information from the beneficiaries.

The Law provides that the government may determine a specific allocation for assets deposited under the Law and prescribed in favor of the State when the holder or his beneficiaries have been subject to serious violations of international humanitarian law.

Any person who has a claim to the assets may submit a request for information to the Consignment office. This request is, however, subject to certain conditions. The Consignment office must decide on the request for restitution within six months of the request. If the decision is favorable, the assets will be transferred to the holder.

The law in question entered into force on June 1, 2022.


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