Financial Crime World

Here’s the article in markdown format:

Belgium Takes Strides in Combating Financial Crime with New Banking Regulations

In 2021, the Belgian banking sector underwent significant developments as the country implemented crucial legislation aimed at strengthening its fight against financial crime. The introduction of the CRD V/CRR II package into Belgian law marked a major milestone in completing the EU banking union and finalizing the implementation of Basel III framework.

Strengthening Regulation with the Banking Act

The Banking Act, which transposes various EU directives and regulations, has integrated the three pillars of the EU Banking Union: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism, and common deposit guarantee schemes. This comprehensive legislation ensures a more robust framework for regulating banks in Belgium, enhancing transparency and accountability.

National Bank of Belgium Issues Key Guidelines

The National Bank of Belgium (NBB) has issued several communications and circulars to transpose European Banking Authority (EBA) guidelines into the Belgian prudential framework. These include:

  • Guidelines on assessing the suitability of members of the management body and key function holders
  • Internal governance under CRD IV
  • Sound remuneration policies under CRD IV

Regulatory Regime for Banks in Belgium

According to the Banking Act, only certain types of entities are permitted to collect deposits from the public or offer deposit services in Belgium. These include:

  • Belgian credit institutions
  • EEA credit institutions with an EEA passport
  • Branches of non-EEA credit institutions established in Belgium

Institutions are deemed to take deposits from the public if they engage in marketing activities targeting more than 50 persons or make direct or indirect use of intermediaries. Only authorized institutions can refer to themselves as credit institutions or banks in their corporate name, purpose, securities, and marketing materials.

Investment Services in Belgium

Authorized institutions may provide investment services in Belgium without obtaining a separate license, except for certain types of loans that require separate registration. Lending is not a regulated activity in Belgium, allowing institutions to conduct it without a license.