Financial Crime World

Belgium Takes Tough Stance on Financial Crime with Updates to AML/CTF Regulations

Belgium has strengthened its anti-money laundering and counter-terrorist financing (AML/CTF) regulations to combat the growing threat of financial crimes such as money laundering and terrorism financing. This move underscores the country’s commitment to maintaining a robust financial landscape that attracts institutions and service providers from across the European Union and around the world.

Money Laundering Prohibitions in Belgium

  • Article 505 of the Penal Code renders money laundering a criminal offense punishable by up to five years’ imprisonment.
  • The law prohibits money laundering in Belgium, with domestic legislation updated several times to incorporate European Union directives.
  • The scope of predicate offenses has been expanded beyond drug trafficking to include terrorist financing.

Regulatory Oversight

Belgium’s financial institutions are overseen by:

  • Belgian Banking and Finance Commission (CBFA): responsible for regulating banking and finance activities
  • Belgian Gaming Commission: regulates casinos
  • CTIF-CFI: monitors professions not regulated by the CBFA or Belgian Gaming Commission
  • Financial Services and Markets Authority (FSMA): the apex regulatory body, responsible for safeguarding the country’s financial system and ensuring AML/CTF compliance

The Role of the FSMA

The FSMA is an autonomous public organization established in 2011. Its primary mandate is to:

  • Ensure the fair and orderly functioning of Belgium’s financial markets
  • Safeguard the country’s financial system
  • Ensure AML/CTF compliance through close collaboration with the National Bank of Belgium

Conduct Regulations

The FSMA issues conduct guidelines that apply to all financial institutions operating in Belgium, aimed at ensuring:

  • Equitable treatment of financial services and products
  • Stringent safety standards

AML/CTF Regulations in Belgium

Belgium has incorporated the European Union’s Anti-Money Laundering Directives (AMLD) into its national legislation. The country amended its legislation in 2017 to incorporate the Fifth Anti-Money Laundering Directive, broadening the scope of AML/CTF regulations to cover:

  • Cryptocurrency service providers
  • Other sectors

Penalties

Noncompliance with money laundering regulations in Belgium carries severe penalties, including:

  • Fines of up to €1.6 million for businesses
  • Imprisonment for up to five years for individuals
  • Individuals found guilty of AML compliance violations may incur fines of up to €5 million
  • Businesses could face penalties amounting to 10% of their previous year’s earnings

Belgium’s tough stance on financial crime underscores its commitment to combating money laundering and terrorism financing, ensuring the integrity of its financial system, and maintaining its position as a hub for international finance.