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Belgium Tightens Internal Controls to Prevent Financial Crimes

In a bid to prevent money laundering and terrorist financing, Belgium has strengthened its internal controls for reporting entities. The country’s law on the prevention of money laundering, also known as the AML Law, requires these entities to develop effective policies, procedures, and internal control measures to comply with financial sanctions.

What are the Provisions of the Law?

The AML Law stipulates that reporting entities must define a control system to observe financial sanctions. This includes:

• Developing risk management models
• Conducting due diligence on customers and transactions
• Reporting suspicious transactions
• Maintaining records
• Ensuring staff awareness of financial sanctions

Who are Reporting Entities?

The obligation to implement internal controls applies to entities subject to the Law on the Prevention of Money Laundering (LBC law) and listed in Article 5 of the AML Law. These include:

• Financial institutions such as banks, insurers, and stockbrokers
• Non-financial professions like notaries, lawyers, estate agents, diamond merchants, accountants, and more

Which Financial Sanctions Apply?

The internal controls are specifically designed to prevent the use of the financial system for money laundering, terrorist financing, and proliferation of weapons of mass destruction. The obligation applies to financial sanctions imposed under sanctions regimes against terrorism or the proliferation of weapons of mass destruction.

Who Supervises Compliance?

Compliance with the internal control measures is monitored by:

• The supervisory authorities exercising AML monitoring on reporting entities
• The Treasury, which is responsible for detecting and reporting any infractions against financial sanctions

Key Differences with Enhanced Due Diligence Measures for High-Risk Countries

It’s essential to distinguish between internal controls for financial sanctions and enhanced due diligence measures for high-risk countries. While both are mentioned in the AML Law, they concern different obligations:

• Internal controls focus on developing a system to comply with financial sanctions
• Enhanced due diligence measures aim to exercise greater vigilance in business relationships and transactions with entities from high-risk countries

Help is Available

For any questions or concerns about financial sanctions, reporting entities can contact the Treasury via email at quesfinvragen.tf@minfin.fed.be.