Financial Crime World

Belgian Regulator Emphasizes Enhanced Due Diligence Measures for High-Risk Transactions

New Guidelines Issued by Belgian Regulator

The Belgian regulator has released new guidelines requiring financial institutions to apply enhanced due diligence measures in specific circumstances to prevent money laundering and terrorist financing.

Enhanced Scrutiny Required for High-Risk Situations

According to the guidelines, obliged entities must conduct additional scrutiny when dealing with:

  • Natural or legal persons established in high-risk third countries (Article 38)
  • Transactions linked to serious fiscal fraud (Article 39)
  • Business relationships with politically exposed persons

Politically Exposed Persons

Financial institutions must take specific measures when dealing with politicians, their family members, or individuals closely associated with them. These measures include:

  • Obtaining senior management approval for establishing or continuing business relationships
  • Verifying the source of wealth and funds involved
  • Subjecting the relationship to enhanced scrutiny

Correspondent Relationships

Belgian credit institutions and other financial institutions must exercise heightened due diligence when establishing correspondent relationships with institutions from third countries. This includes:

  • Gathering information about the respondent institution’s business and reputation
  • Assessing its anti-money laundering controls
  • Obtaining senior management approval for new relationships

Atypical Transactions

Financial institutions are required to analyze atypical transactions to determine whether they may be linked to money laundering or terrorist financing. This involves examining:

  • The background and purpose of complex and unusually large transactions
  • Unusual patterns of transactions with no apparent economic or lawful purpose

Reporting Suspicions

The guidelines emphasize the importance of reporting suspicions of money laundering or terrorist financing to the Belgian Financial Intelligence Processing Unit (CTIF-CFI). Obliged entities must report any facts that may be related to these crimes, including:

  • Suspicious funds
  • Transactions
  • Attempted transactions

Commitment to Preventing Money Laundering and Terrorist Financing

“These new guidelines demonstrate our commitment to preventing money laundering and terrorist financing,” said a spokesperson for the Belgian regulator. “By requiring financial institutions to apply enhanced due diligence measures in high-risk situations, we can better protect the integrity of the financial system and prevent illegal activities.”