Financial Crime World

Belgium Tightens Screws on Financial Crimes: AML/CFT Regulations Take Center Stage

In an effort to combat the growing threat of financial crimes, Belgium has strengthened its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulations. The new measures aim to safeguard the country’s robust financial landscape, which attracts institutions and service providers from across Europe and around the world.

The Threat of Financial Crimes in Belgium

Money laundering is strictly prohibited in Belgium, with Article 505 of the Penal Code imposing a maximum penalty of five years’ imprisonment. The country’s domestic legislation incorporates Council Directive 2001/97/EC on preventive measures for money laundering, which was updated in January 2010 to encompass the European Union’s third anti-money laundering directive.

Regulatory Oversight

Belgian financial institutions are under the oversight of the Belgian Banking and Finance Commission (CBFA), while casinos fall under the regulation of the Belgian Gaming Commission. The Financial Services and Markets Authority (FSMA) serves as the apex regulatory body, entrusted with safeguarding the nation’s financial system and ensuring AML/CFT compliance.

The Role of the FSMA

  • The FSMA operates as an autonomous public organization, reporting to the Belgian parliament, and is governed by Royal Decree.
  • Its primary mandate is to uphold the fair and orderly functioning and transparency of Belgium’s financial markets.
  • The authority collaborates closely with the National Bank of Belgium, working toward six key objectives:
    • Monitoring and supervision of financial markets
    • Ensuring institutional compliance with business norms and regulations
    • Oversight of financial products

Conduct Guidelines

The FSMA issues conduct guidelines that apply to all financial institutions operating in Belgium, aligning with its regulatory objectives. These guidelines aim to ensure equitable and consistent treatment of financial services and products across the industry while upholding stringent safety standards.

Strengthened AML/CFT Regulations

Belgium’s AML/CFT regulations have been further strengthened by the incorporation of the Fifth Anti-Money Laundering Directive (5AMLD) into national legislation in September 2017. The amendment broadened the scope of AML/CFT regulations to cover:

  • Cryptocurrency service providers
  • Prepaid cards
  • High-value commodities transactions
  • Additional beneficial ownership measures

Penalties for Noncompliance

Noncompliance with money laundering regulations in Belgium carries both financial and criminal repercussions. Individuals found guilty of money laundering face up to five years’ imprisonment and fines of up to €800,000, while businesses may encounter fines reaching up to €1.6 million. Similarly, individuals found guilty of AML compliance violations may incur fines of up to €5 million, while businesses could face penalties amounting to 10% of their previous year’s earnings.

Conclusion

Belgium’s stringent penalties underscore its commitment to combating financial crime and ensuring the integrity of its financial system. The country’s robust regulatory framework serves as a model for other European nations in the fight against money laundering and terrorist financing.