Laimz (Prevention of the use of the financial system for the purposes of money laundering or terrorist financing - Close associate of a politically exposed person - Definition - Judgment) [2025] EUECJ C-509/23 (19 June 2025)

Executive summary

The Court gave a preliminary ruling on how Directive (EU) 2015/849 defines a "person known to be a close associate" of a politically exposed person, in a dispute between Laimz SIA, a gambling-services provider, and the Latvian Gambling Supervision Inspectorate over a financial penalty for AML/CFT breaches. The judgment also addressed how obliged entities within a group may share information and apply decisions taken by another group member, and it situated gambling providers within the Directive’s enhanced due diligence framework.

Key points

• Parties: Laimz SIA v. Latvia’s Gambling Supervision Inspectorate; context was a penalty for alleged AML/terrorist-financing compliance infringements.
• Core issue: interpretation of Article 3(11)(a) of Directive 2015/849 on "close associates" of a PEP, plus Articles 14, 11(d), and 45 on ongoing monitoring, enhanced due diligence, and intra-group information sharing.
• Court focus: the Directive’s prevention-based, risk-based structure; PEP measures are preventive, not criminal, and are not meant to stigmatise PEPs.
• Sector angle: gambling services are expressly within the Directive and are singled out as higher-risk services for customer due diligence.
• Group-compliance angle: the judgment addresses when obliged entities in a group can share information and rely on decisions taken by another obliged entity in the same group.
• Sanctions/export-control relevance: no sanctions or export-control regime is at issue, but the ruling reinforces AML/CFT screening and escalation standards relevant to politically exposed and closely connected persons.

Why it matters

For sanctions and geopolitical-risk teams, the decision matters because it sharpens the definition of relationships that trigger enhanced scrutiny around PEP-linked clients and counterparties, especially in gambling and other high-risk sectors. It also supports group-wide compliance coordination, which is material for detecting layered ownership, influence, and potential illicit-finance exposure.

Implications

Compliance teams should treat PEP-adjacent relationships as a legally defined risk category requiring evidence-based assessment, not automatic exclusion, and should ensure procedures exist to identify and document "close associate" status. Group entities should align their customer due diligence, information-sharing, and escalation processes so that decisions and risk findings can be consistently applied across the group while preserving each entity’s own responsibility under Directive 2015/849.