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Back to Laws Prohibiting Investments in Controversial Weapons

I. Law Prohibiting the Financing of Cluster Munitions

Luxembourg prohibited the financing of cluster munitions in 2009, in the law ratifying the Convention on Cluster Munitions.[1] The law simply provides that “it is forbidden for any natural or legal person to knowingly finance cluster munition weapons or explosive submunitions.”[2] Anyone guilty of financing cluster munitions or explosive submunitions may face between five and ten years of jail time, and/or a fine of between €25,000 (about US$27,840) and €1,000,000 (approximately US$1,113,520).[3]

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II. An Incomplete Law

This law raises several questions. What qualifies as “financing”? Does indirect investment qualify? How much due diligence would an investor be expected to conduct in order to avoid “knowingly” financing cluster munitions? The government of Luxembourg does not appear to have issued any implementing orders or regulations, or any sort of official instructions or explanations, that would answer such questions. Furthermore, the law does not provide for any supervision or monitoring mechanism.[4]

Luxembourg’s General Pension Common Compensation Fund (Fonds de compensation commun au régime général de pension) publishes a list of companies that are excluded from its investment portfolios, and several companies are on this list due to involvement in cluster munitions.[5] However, this list does not appear to have any binding force outside of the Compensation Fund itself. Furthermore, many companies on that list are not involved with cluster munitions, but are listed because of other practices deemed unethical by the Compensation Fund, even if those practices are not necessarily illegal.

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III. Potential Extension of Prohibition to Other Types of Controversial Weapons

Luxembourg may, in the future, adopt legislation banning investments in antipersonnel mines.   In March 2016, the Luxembourger Minister of Foreign and European Affairs, Jean Asselborn, made a foreign policy declaration before Parliament in which he stated that “the government takes very seriously the issues related to the financing of arms trafficking, and is thinking about replicating the prohibition on financing cluster bombs in the context of the Convention against Anti-personnel Mines, therefore going beyond the text of the Conventions.”[6]

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Prepared by Nicolas Boring
Foreign Law Specialist
November 2016


[1] Loi du 4 juin 2009 portant approbation de la Convention sur les armes à sous-munitions, ouverte à la signature à Oslo le 3 décembre 2008 [Law of 4 June 2009 Approving the Convention on Cluster Munitions, Open for Signature in Oslo on 3 December 2008], http://www.legilux.public.lu/leg/a/archives/2009/0147/a147.pdf#page=2, archived at https://perma.cc/PSQ7-6595.

[2] Id. art. 3 (all translations by author).

[3] Id. art. 4.

[4] ROOS BOER, HESTER BRINK, SUZANNE OOSTERWIJK & MICHEL RIEMERSMA, WORLDWIDE INVESTMENT IN CLUSTER MUNITIONS, A SHARED RESPONSIBILITY 199 (PAX, June 2016 Update), available at https://www.paxforpeace.nl/media/files/worldwide-investments-in-cluster-munitions-pax-june-2016.pdf, archived at https://perma.cc/STD9-33V4.

[5] FDC Exclusion List, FONDS DE COMPENSATION COMMUN AU RÉGIME GÉNÉRAL DE PENSION [GENERAL PENSION COMMON COMPENSATION FUND] (May 15, 2016), http://www.fdc.lu/fileadmin/file/fdc/Liste_d_exclusion_20160515.pdf#pageMode=bookmarks, archived at https://perma.cc/RBN8-WCA4.

[6] Communiqué [Press Release], Gouvernement [Luxembourger Government] Déclaration sur la politique étrangère et européenne de Jean Asselborn à la Chambre des députés [Declaration on Foreign and European Policy by Jean Asselborn to the Chamber of Deputies] (Mar. 8, 2016), http://www.gouvernement.lu/5787181/08-asselborn-declaration-chd, archived at https://perma.cc/4WT4-RLQJ.

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Last Updated: 08/08/2017