As Luxembourg deepens its integration into European enforcement frameworks, criminal law is no longer a marginal concern for business leaders. A new generation of practitioners argues that penal risk is now strategic risk, and they have established the country’s first dedicated boutique to help tackle it.
For decades, Luxembourg’s reputation rested on stability, predictability and compliance. Criminal law, while present, was often perceived as peripheral in a jurisdiction better known for fund structuring, cross-border finance and regulatory sophistication than for prosecutions. That perception no longer reflects reality.
Over the past ten to fifteen years, criminal law has moved decisively into the centre of Luxembourg’s legal and economic landscape. The drivers are familiar: intensified European cooperation, the professionalisation of financial investigations, the rise of compliance-based offences and a growing focus on individual liability. Together, they are reshaping how executives, boards and institutions must think about risk.
“Luxembourg is today fully integrated into all the European dynamics of control, investigation and sanctions,” says Aurore Merz-Spet, a criminal lawyer admitted to the Luxembourg Bar for 17 years. “The growing criminalisation of economic activities and the intensification of cross-border judicial cooperation have turned what used to be an existing risk into a central issue for executives, investors and financial institutions.”
From regulatory risk to criminal exposure
One of the most significant shifts lies in the overlap between regulatory breaches and criminal prosecution. Anti-money laundering failures, internal control weaknesses and breaches of duties of vigilance were once largely addressed through supervisory sanctions. Increasingly, they also attract the attention of prosecutors.
“This is something that is still underestimated,” says Lionel Spet, President of the Criminal Law Commission of the Luxembourg Bar. “There is the regulatory risk, obviously, but alongside that we very often see the public prosecutor initiating criminal proceedings for compliance offences.”
The data supports this sense of acceleration. According to figures drawn from the activity reports of the Luxembourg District Prosecutor’s Office, requests for international judicial cooperation rose from 462 in 2020 to 695 in 2023. Cybercrime and fraud cases have increased sharply, while phishing incidents jumped from five reported cases in 2019 to more than a thousand in 2023.
For business leaders, this evolution has two consequences. First, criminal exposure is no longer confined to cases of fraud or intentional wrongdoing. Serious management failures, conflicts of interest or governance disputes can cross the threshold into criminal territory. Second, the risk is rarely confined to Luxembourg alone.
The Europeanisation of criminal risk
Luxembourg’s position as a financial hub almost guarantees a cross-border dimension. Investors, fund managers, service providers and counterparties are typically spread across several jurisdictions. As a result, criminal investigations are increasingly initiated abroad, with tangible effects at home.
“What this means in practice is that criminal risk is no longer limited to the borders of the country,” Spet explains. “It has become a European risk.”
European arrest warrants, asset-freezing orders, coordinated searches and seizures are now used routinely and with notable speed. The creation of the European Public Prosecutor’s Office has further shifted the balance, particularly in cases involving EU financial interests.
For companies and executives, this makes a purely national defence strategy insufficient. Decisions taken in Luxembourg can be scrutinised elsewhere, under different procedural rules and investigative cultures, with enforcement ultimately executed locally.
Reputation as evidence
Another defining feature of modern criminal law is the role of perception. In complex economic cases, media exposure and institutional credibility can shape the trajectory of an investigation long before a court is seized.
“In some cases, the way an affair is perceived can be as decisive as the judicial outcome,” says Marie Ehrmann, a criminal lawyer with a focus on bodily injury, labour law and compensation litigation. “A modern criminal defence must be technically irreproachable, but also strategically responsible.”
This extends to the earliest stages of an investigation. Dawn raids, document seizures and interviews are moments of acute vulnerability for organisations. How staff react, what information is provided and how cooperation is framed can influence not only the legal file, but also the narrative surrounding it.
“People often make mistakes in the urgency,” Merz-Spet notes. “They are afraid. Police arrive, there is a search, and panic sets in. Once people understand the rules, things proceed much more calmly, including cooperation with the authorities, and that changes everything.”
Anticipation rather than reaction
Perhaps the most profound change is cultural. Criminal law is no longer something that can be dealt with only when a summons arrives. Increasingly, it demands anticipation: training, internal protocols and a basic understanding of criminal exposure across the organisation.
“This is not only about executives,” Merz-Spet emphasises. “It concerns everyone, from the person who opens the door to the police to the members of governance bodies.”
The idea that early intervention matters as much as courtroom advocacy is gaining traction among practitioners. “Every stage is important, not just pleading the case,” she says. “For us, the early stages are even more important than the pleadings.”
A new type of criminal law practice
It is against this backdrop that a new criminal law firm, Eclipse Avocats, is launching in Luxembourg in January. Founded by Spet, Merz-Spet and Ehrmann, the firm positions itself exclusively in criminal law and criminal risk prevention.
The creation of such a boutique is itself indicative of the market’s evolution. “There was, in our view, a lack of a structure dedicated to dealing with this type of offence in a strategic way,” Merz-Spet explains. “Not simply general criminal litigation, but criminal risk as a strategic issue.”
The founders insist the move is less about specialisation for its own sake than about adapting to the realities of modern enforcement. Criminal law today intersects with finance, regulation, governance and reputation in ways that traditional practice models do not always reflect.
Spet, who has more than two decades of experience in business criminal law, is cautious about scale. “You can only provide good service if you remain at a human scale,” he says. “A good criminal defence only exists if the client trusts you and truly feels that you are concerned by their problem.”
What boards should take away
For boards and senior executives, the message is not that Luxembourg has become a high-crime jurisdiction. Rather, it is that the definition of criminal risk has expanded, and with it the expectations placed on decision-makers.
Serious management faults, compliance failures and cross-border disputes can all carry penal consequences. Investigations may originate abroad, unfold rapidly and generate reputational damage long before any finding of guilt.
Criminal law, once a last-resort response, is increasingly a dimension of corporate strategy. As Ehrmann puts it, “The best criminal defence remains preparation: understanding mechanisms of liability, anticipating risk and integrating the criminal dimension into decision-making processes.”
In a jurisdiction built on trust, the growing prominence of criminal law is less a contradiction than a reflection of Luxembourg’s maturity as a financial centre. The challenge for leaders is to recognise that penal risk is no longer exceptional — it is structural.
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