#Title: Belgium’s Robust Response to Financial Crime: Understanding AML Regulations and Compliance Measures
##Overview Amidst Belgium’s reputation as a powerful European nation, financial crime threats persist. Money laundering and terrorist financing activities are on the rise, with Belgium’s Financial Intelligence Unit (FIU) recording over 46,000 suspicious transactions in 2021 - a 50% increase from the previous year. To shield its economy and contribute to global efforts against money laundering and counter-financing of terrorism (AML/CFT), Belgium has enacted a stringent regulatory framework.
This article provides an overview of the key Belgian financial regulators, regulations, and compliance measures aimed at mitigating financial crime risks.
Belgian Financial Regulators
Financial Services and Markets Authority (FSMA)
Established in 2011, the Financial Services and Markets Authority (FSMA) is Belgium’s primary financial regulator. Its primary functions include:
- Supervision of financial products and services, including pension schemes
- Ensuring compliance with financial conduct rules and AML/CFT regulations
- Overseeing markets and distributed financial information surveillance
- Financial education
The FSMA collaborates with the National Bank of Belgium (NBB) and the Federal Public Service Economy in its supervisory role. It can conduct onsite inspections, request documentation, and take enforcement actions against non-compliant institutions. On a global stage, the FSMA represents Belgium in various international financial organizations and is a signatory to numerous anti-financial crime agreements.
Financial Intelligence Processing Unit (CTIF)
Another crucial Belgian regulator is the Financial Intelligence Processing Unit (CTIF), which serves as the country’s financial intelligence unit. The CTIF, an autonomous, independent body, is responsible for collecting and processing AML/CFT data, including suspicious transaction reports, to aid in subsequent law enforcement investigations. It also collaborates with counterpart FIUs to aid in financial crime investigations and prosecutions.
Belgian Key AML Regulations
Belgium’s primary AML/CFT legislation is the “Law of 18 September 2017 on the Prevention of Money Laundering and Terrorist Financing”, commonly known as the “AML Law”. This regulation transposes the EU’s Anti-Money Laundering Directives and imposes risk-based AML/CFT requirements for firms operating within Belgium’s jurisdiction.
Penalties for Non-compliance
Penalties for non-compliance with the AML Law can reach up to €1,250,000 for non-financial companies and €5000 or 10% of annual turnover (whichever is greater) for financial institutions.
Compliance Measures in Belgium
To comply with Belgium’s AML Law, firms must assess and establish the risk level of individual customers and apply proportionate compliance measures. Effective risk assessment relies on:
- Customer due diligence (CDD) measures to establish and verify customer identity and build risk profiles
- Ultimate Beneficial Ownership (UBO) verification of corporate structures
- Customer screening against global watchlists and adverse media sources
- Ongoing monitoring and adverse media scrutiny to ensure changes in customer status are captured.
Effective Screening
Effective screening relies on a global, tailored, and fast solution. Ripjar’s Labyrinth Screening platform provides comprehensive, real-time screening, allowing for quick and confident decision-making. For more information on how Ripjar can support AML compliance in Belgium, contact us.
Conclusion
Staying informed about AML regulations and the steps required to mitigate risk is crucial for organizations setting up or doing business in Belgium. Effective risk assessment and compliance measures are essential for adhering to the Belgian AML Law and contributing to global efforts against financial crime.