Title: Belgian Financial Intelligence Unit: Addressing Gaps in Anti-Money Laundering and Counter-Tterrorist Financing Measures
FATF Report Highlights Structural Issues in Belgian Authorities’ AML/CTF Capabilities
The Financial Action Task Force (FATF) recently released a report on Belgiu’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures, highlighting several issues hindering the effectiveness of Belgian authorities in combatting financial crimes.
Insufficient Resources for Belgian Law Enforcement Authorities
One of the main findings of the report pointed to the insufficient resources of the Belgian judicial authorities. This issue impacted their ability to address AML activities as the report noted, “structural problems prevent Belgian law enforcement authorities from being fully effective.”
CTIF’s Effectiveness vs. Underutilized Resources
Despite the criticism, the Belgian Financial Intelligence Unit (CTIF) was praised for its access to useful AML information and its ability to produce high-quality operational and strategic analyses. However, the law enforcement authorities were criticized for not effectively using the data at their disposal.
- Awareness and understanding of ML risks among Belgian prosecution authorities are good, but there is no clearly defined overall strategy at the national level for combatting ML.
- Lack of coordination between judges leads to prioritization issues in ML prosecutions.
Non-Financial Sectors’ Compliance and Prosecution
The report highlighted that some ML offenses in non-financial sectors might be evading prosecution due to the disproportionate number of transaction reports coming from these sectors. The following sectors raised concerns:
- Lawyers
- Diamond traders
The possibility of seizure or confiscation of property plays a crucial role in initiating criminal investigations. Prosecutions primarily focus on predicate offenses, such as:
- Fraud
- Bankruptcy-related offenses
- Tax fraud
- Narcotics trafficking
Cross-border currency movements and AML investigations
Belgium’s system for detecting cross-border currency movements functions well, but declarations/disclosures from it are not being subjected to follow-up, prosecution, or confiscation proportionate to the identified risks. This is due to a lack of human resources within the public prosecutor’s office.
Lengthy Proceedings and Sanctions
The sanctions regime in Belgium was deemed satisfactory, but lengthy proceedings slow down the implementation of sanctions, thereby decreasing their deterrent effect. The legal framework for prosecuting legal persons presents challenges, and the limited number of complex ML cases and proceedings focused on legal persons resulted in limited convictions.
Access to Financial Intelligence
Despite these shortcomings, Belgian authorities have access to a wide range of financial and other intelligence that is necessary for investigating ML, predicate offenses, and TF.
- CTIF has overall effective access to financial intelligence and a large amount of other information through extensive contacts and memorandums of understanding.
Impact of FATF Report
The FATF report emphasizes the need for Belgian authorities to address these gaps to maintain an effective AML/CTF framework. By focusing on resources, overall strategy, coordination, and prioritization, Belgium can enhance its AML/CTF capabilities and better combat financial crimes.