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Belgium's AML/CFT Regulations: Combating Financial Crimes

· 3 min read
Hannah Chang
Fraud Prevention Manager

In Brussels, Belgium, a robust set of Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Regulations have been instituted to fortify the financial landscape against money laundering and terrorist financing. Enforced by various regulatory bodies, these stringent measures protect institutions and service providers under the Belgian jurisdiction.

Prohibition of Money Laundering​

Money laundering is strictly prohibited in Belgium under the Law of January 11, 1993. The criminal offense is punishable by a maximum sentence of five years' imprisonment as outlined in Article 505 of the Belgian Penal Code. The EU's Council Directive 2001/97/EC was incorporated into Belgian legislation in January 2004, expanding the range of money laundering predicate offenses to include not only drug trafficking but also the financing of terrorist acts or organizations.

Regulatory Oversight​

Financial institutions in Belgium are subject to the oversight of the following regulatory bodies:

  • Belgian Banking and Finance Commission (CBFA) - regulates banks, exchange houses, stock brokerages, and insurance firms.
  • Belgian Gaming Commission - regulates casinos.
  • CTIF-CFI - oversees other professions not overseen by the CBFA or other agencies.

The Financial Services and Markets Authority (FSMA) safeguards the Belgian financial system and ensures AML/CFT compliance. Financial entities operating in Belgium must adhere to the FSMA's guidelines for regulatory compliance.

Role of the FSMA​

Established on April 1, 2011, the FSMA replaced the Banking Finance and Insurance Commission (CBFA). The FSMA is an autonomous public organization that oversees financial markets and institutions, achieving the following six key objectives:

  1. Monitoring financial markets and regulating financial products.
  2. Supervising financial service providers.
  3. Ensuring financial education and pension plan supervision.
  4. Collaborating closely with the National Bank of Belgium.
  5. Maintaining transparency and orderly operations.
  6. Safeguarding the nation's financial system.

Conduct Regulations and AML/CFT Regulations​

The FSMA promulgates conduct guidelines for all financial institutions in Belgium, ensuring fair and consistent treatment of financial services and products while maintaining stringent safety standards.

Belgium is obligated to implement the EU's Anti-Money Laundering Directives (AMLD) into its national legislation. In September 2017, Belgium amended its legislation to incorporate the Fifth Anti-Money Laundering Directive (5AMLD), expanding the scope of AML/CFT regulations to cover cryptocurrency service providers, prepaid cards, high-value commodities transactions, and beneficial ownership measures. With the implementation of the Sixth Anti-Money Laundering Directive (6AMLD) in December 2020, compliance was mandated by June 3, 2021.

Penalties​

Noncompliance with money laundering regulations in Belgium carries severe criminal and financial penalties. Individuals found guilty of money laundering face a maximum sentence of five years' imprisonment and fines up to €800,000. Businesses may face fines reaching up to €1.6 million. Individuals found guilty of AML compliance violations may incur fines of up to €5 million, while businesses face penalties amounting to 10% of their previous year's earnings. Those who obstruct AML investigations risk penalties of up to €5 million and one year of imprisonment. These strict penalties underscore Belgium's unwavering commitment to combating financial crime and maintaining the integrity of its financial sector.